Building equity in your home is always a good idea, but definitely not something to be taken lightly especially when it comes to the home renovation price tag. While it may be tempting to take the easy way out, it is always a good idea to ensure you hire a professional and get the job done right. After all, if selling your home is something you see on the horizon, then it is important to ensure your home is fully renovated to the seller’s expectation. Sounds expensive right?
Finance a home renovation
Here are 4 ways to finance a home renovation that can give you a great bang for your buck:
1. Refinance your mortgage
This is the perfect way to tap into your home equity while continuing to build equity in your home. A cash-out refinance is a great option for securing the funds you need at an interest rate that is reasonable. Another benefit to this option is that you will be paying it off for the duration of your mortgage. Meaning, that you won’t see a massive increase in your payments!
2. Get a Home Equity Line of Credit
On a general bases you can access up to 80% of the equity in your home. You can determine this amount by deducting the balance on owing on your mortgage against the market value of your home. This can be a great option for paying for your home renovations, but there are some restrictions so speak to a mortgage specialist to be sure you qualify.
3. Use your savings
A debt-free renovation sounds pretty amazing, doesn’t it? Cutting back on spending and being very intentional with your budgeting can get you there in no time. If none of the other options work, this may just be it for you. Although it may be a lengthy process to save the money necessary, you will avoid high-interest rates, fees, and monthly payments. And that is pretty sweet.
4. Secure a second mortgage
An alternative to refinancing, securing a second mortgage allows you to borrow against the equity of your home using your home as collateral. With this option, you will receive a lump sum that can be used however you choose. Just be sure you are making a good decision or speak to a professional who can look at your unique situation to advise you appropriately.
If none of the above home renovation financing options give you the results you need it is always worth considering throwing a little sweat equity into the mix. It will take time and effort, but it will definitely bring down the costs. Are you interested in additional information? Give us a call today, for a no-obligation conversation.
