Whether you are thinking of selling your home in the near future, or you just want to give it an updated, fresh look, home improvement projects can transform the entire look of your home. The most common types of improvements include kitchen and bathroom renovations. Finishing your basement can also give you more space, and increase the value of your home if you wish to sell.
Of course, these projects can cost thousands of dollars, even if you decide to do it yourself. That doesn’t mean you have to scrimp and save your pennies, though. You can have the home of your dreams by using finance options that won’t break the bank and can give you peace of mind knowing your dollars are working for you. Here are just some of the options you can explore:
Home improvement loan
This is probably the easiest and least expensive option. A home improvement loan can give you the money you need to complete your project in a timely fashion, while giving you low payment and interest options. You don’t have to go to your own financial institution for one of these loans, if they’re not offering affordable rates. Credit unions in Michigan, for example, typically offer lower interest rates than traditional financial institutions although there are several factors that will determine the rate you will pay, such as your overall credit rating.
Use your tax refund
Did Uncle Sam give you a nice big refund this year? Put it toward your home renovation project. This is a great way to invest your hard-earned money. Depending on the type of project you have in mind, you can realize a big return in value. For example, updating your kitchen and bathroom will raise the value of your home, while installing a pool, hot tub or sauna may not give you the same value results.
Home equity line of credit
This can be a good option if you have been in your home for several years and have built up a nice equity. Let’s say you acquired mortgage loans for $100,000 15 years ago, and you’ve paid off $75,000. That’s how much equity you have in your home, and you can use that money to finance your home improvement project. Typically, you don’t pay the money back until you sell your home. This reduces the amount of equity you have, but it also increases the value of your home; so instead of selling it for $175,000, you may be able to sell it for $195,000. You’re still ahead of the game!
Traditional personal loan
You can visit your financial institution and acquire a traditional loan for your home improvement project. Depending on your overall credit history, you may be able to secure a short-term loan with a low interest rate. Just make sure that the payments are ones you’ll be able to afford.
Credit card
Depending on your credit limit, and the size/cost of your project, you may consider putting at least some of the cost on your credit card. Be careful though; you may end up paying much more in interest charges if you only pay off the minimum balance every month. It may be worth your while getting a credit union loan, with lower interest rates and better terms.
A home improvement project should not be taken lightly. There are many factors to consider, including who you’re going to hire and how you’re going to finance the project. If current DIY home improvement spending trends continue, lending institutions of all types are going to be very busy helping homeowners with their financial needs.
