A home is considered to be a reflection of its owner. Whether you have just begun your journey as a homeowner or been living in a house for decades, the idea of customizing the home as per your lifestyle and preferences can be both thrilling and daunting. Well, you can always boost the elegance of the house and uplift its sophistication but the whole process can cause you a large chunk of money at once. As per a Report in 2017, the average remodelling cost for a house even fewer than 1000 square feet is around $18,350. If you are looking for funding your upcoming home renovation and if the above figure intimidates you, we have some of best ways to help you spruce up your dream home and make renovation enjoyable and comfortable.
Refinance your mortgage
Refinancing the mortgage is one of the most effective methods for stashing away extra cash every month and paying for home renovation. If you can find a refinance at a lower interest rate and for a longer loan term, you can save loads of money which can be utilized later for jumping into renovations.
If your home has high equity, a faster way to refinance is to go for Cash-Out Refinance. In this, you refinance your mortgage for an amount higher than you actually owe helping you to pay your original mortgage and using the leftover cash to remodel your home into your dream one.
Get a Home Improvement Loan
Taking a Home Improvement loan is similar to taking a personal loan with a similar rate of interest. There are many sources where you can get a Home Improvement loan at an impressive interest rate. You can approach renovation financing companies if your desired loan amount tends to be between $6000 to $35,000. Anything above or below that and you have to look for alternatives as the rate of interest can get extremely high for that.
Getting a Home Equity Line of Credit
If you already have a low rate of interest on your home loan or if you have paid it off completely, refinancing is definitely not what you are looking for. A home equity line of credit (HELOC) is a cost-effective method where you can get a maximum amount loan for a specific period at an affordable interest rate with your home as collateral. Also, it is tax deductible up to $100,000 making it one of the best choices for the home renovation project.
Take A Home Equity Loan
Another option for not refinancing your entire mortgage is taking up a home equity loan. The home Equity loan is similar to HELOC except you cash out all the money at once. However, the interest rate is fixed and usually higher than HELOC. As the home’s value appreciates over time, you can take it as “second mortgage” while paying the existing loan. But, you need a high credit score, low debt- to income ratio and enough income statement to put on the table.
Start Saving and Earning More Cash
Although it sounds like an old-fashioned and dull way, it is still one of the most common and preferred ways for funding your home improvements. You can also earn extra, apart from the regular 9 to 5 job by renting out an extra space in your apartment or leasing out your parking slot if you don’t need it. Although saving and earning doesn’t seem to be an easy method and may take several months, it can be very fruitful in long run.
Great so you’ve saved up and got the money you need to renovate but what should your project be? What will increase the value of your home? Well, we have collected the top 5 ways of increasing your value here! Perhaps there is an old shed that needs some love; then we have a great detailed article about doing just that here!