HOW TO PAY FOR YOUR HOME RENOVATIONS
Improvements can be pricey, but do not allow being unsure of how to pay for it keep you from renovating. Renovations are and excellent way to sell your home faster and for top dollar. Here are a few ideas to cover the costs of updating your home:
Many people dip into their savings accounts to pay for their home renovations, particularly if they are undergoing a minor update. If you do not want to go into debt renovating your home, set a date you would like to start your renovation and save whatever you can until then, including any windfalls.
2. Home equity line of credit
If you have equity in your home, a home equity line of credit allows you to borrow a portion of the total equity amount. Instead of making payments on the entire amount, you will make payments on the amount you have borrowed, similar to a credit card. A line of credit is ideal when you are not sure what the total cost of the project is, or if you anticipate that your borrowing needs may vary.
3. Home equity loan
These loans allow you to borrow against the value of your home. A home equity loan is different from a Home equity line of credit in that you borrow one lump sum and the payment is amortized over the terms of the loan, if you qualify. However, there are risks involved, such as the possibility of losing your home if you cannot make your payments and if you have to refinance, you are limited to a five to seven year term.
4. Personal loan
If you know how much your renovation will cost, a personal loan will give you a lump sum of money to use, which you will repay over an agreed-upon period of time.
5. Credit cards
If the project is small-scale or DIY, you may consider using your credit cards to pay for it. This method gives you an added benefit of accumulating points and rewards quickly. Additionally, your credit score may get a boost when the amount is paid back in a timely and responsible way.