How to finance your home renovation
When you own a home, there is always a project to be done. Maybe you want to renovate a small bathroom or maybe you want to completely redo your kitchen. Perhaps the outside of your home needs some updating and you are looking to renovate the exterior of your home. No matter what work you are doing, you will need to pay for the renovation which isn’t always the easiest task. Renovations can be quite pricey!
Cash loans? Bank loans? Personal loans? What do they all mean?! And what is the best option for you to complete your renovation without harming your personal finances? This guide will help you learn the best ways to finance your home renovation so that you can have the house you want.
Mortgage Refinance
If you financed your home with a mortgage (which many people do!), the current interest rates may be lower than they were when you first funded your home. If this is true, you may be able to refinance and lock in a lower monthly interest rate. Lower monthly payments on your mortgage means extra cash in your pocket each month that you can use to finance your home renovation.
Home Equity Loan
After paying your mortgage for several years, you will have built up equity in your home that you may be able to use in order to complete the renovations you’d like to do. A lender will use your home as collateral for the loan and the more equity you have put into your house, the more money you will be able to obtain for your renovation. If you choose to use a home equity loan to finance your renovation, you will receive a lump sum cash loan to use as needed. This can be a great option especially when you are taking on a big home renovation project.
Fast Cash Loan
One type of loan that you can choose to finance your home renovation is a fast cash loan. With this type of loan, you can have the cash you need, in hand quite quickly. Some fast cash loans will be approved and funded within the same day. This can be very beneficial when you need to fix your home quickly or you hire a contractor who only accepts cash payments. A fast cash loan is an option you should look into if you want to complete your home renovation sooner rather than later!
Personal Loan
If you don’t want to use your home as collateral or refinance your mortgage, you can take out a personal cash loan to complete your home renovations. Personal cash loans typically rely on your credit score. The better credit you have, the more money you will be able to borrow and the better your interest rate will be.
Credit Card
If you don’t have the cash to pay for your home renovations or if you don’t want to take out a cash loan, you can always use a credit card to pay. Credit cards can be beneficial if you have one that offers reward points or a card that has a 0% promotional interest. Just be sure to pay the card off before the interest goes up as many cards have very high interest rates once that promotion goes away!
Family Loans
While you can always ask to borrow money from friends and family, a cash loan from someone you have a personal relationship with can get tricky. You don’t want money to get in the way of your relationship so be sure that you are able to pay the cash loan back in a timely manner! Make an agreement with the person giving you the cash loan and stick to it. Home renovations are important but so are your relationships.
As you can see, there are many way to help finance your home renovations and one of these options will definitely be right for you. Look into each option and pick which will be ideal for your specific monetary, financial and personal situation. From cash loans to credit cards, a loan from a family member to home equity financing, you will find a way to get that home renovation completed and paid for!
