Remodeling your home is a great way to surge its market value.
But significant changes need big bucks, and you may not have sufficient resources to finance the remodel. Don’t worry, it is not as challenging as it seems. Fortunately, there are plenty of options available that do not require you to be flushed with cash. You can remodel your home in peace without having to drain your bank balance. Here are the four most popular ways that financial experts deem best to finance your home remodel project.
1. Using a Personal Loan
Do not have equity in your home, or do not want to use it? No worries, there is an option of personal loan always available.
The option of personal loans is most executable when the remodeling budget is fixed and minor. Moreover, they can be secured quickly without much paperwork.
With all its benefits, two downsides accompany personal loans too. They usually come bearing high interest rates and have shorter repayment periods – ranging between 3 to 7 years.
2. Mortgage Refinancing
Mortgage refinancing is a daunting choice, but if you can get lower interest rates than existing rates on your mortgage, it becomes the most cost-effective way to remodel your home.
Suppose your home’s value has enhanced, and the interest rates have fallen since you bought the house. Here mortgage refinancing can really be a tempting selection.
With cash-out mortgage refinancing, your existing home loan is replaced with a new larger one.
You get the difference between your previous loan and new loan as a cash loan, which usually has low-interest rates.
3. Credit Cards
If you already are on top of your debt, credit cards are the most reliable option for financing a slight home remodeling.
But if the renovations are costly, you need to evaluate the decision to use credit cards thoroughly. If you are confident that you can pay off your monthly bills against the debt, only then using credit cards, seem sensible.
Though, using a zero-interest credit card can save you from the liability of paying interest for six months or even a year. Some companies offer 0% Annual Percentage Rate (APR) that lets consumers pay off their balances before the interest kicks in.
Nonetheless, credit cards are a tricky way to finance home remodeling due to a constant danger of high-interest rates and fees.
4. Home Equity Line of Credit (HELOC)
If you have been living in a house for quite a time now, you have probably gained some equity in the house.
A classic way to finance home renovations, HELOC uses your equity in the home to lend you money.
HELOCs have low-interest rates than personal loans and credit cards and are most suitable for long term projects.
The only downside of HELOC is that interest rates may increase in monthly installments, which can hit you financially.
CustomFin to the Rescue!
Be it superficial work of hammers or a deep renovation project; funding has always caused problems for the homeowners. Are you experiencing similar financing problems? Custom Financing Solutions has a way out for you in a secure, simpler and better manner. Why better? We provide our clients with an array of financing solutions in a virtual environment. From deciding to submission of financing application, as well as payment schemes – everything is online and paperless.
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