You should plan thoroughly and prepare an adequate budget for your home addition or home remodeling project. Fortunately, you can use various services to finance your home improvement. Lines of credit, home equity loans and other private loans can help you cover all the expenses. Learn more about them in this post.
The value of your home can help you pay for its remodeling needs. You can subtract your home’s current value from its remaining mortgage to find its equity value. Banks can let you borrow a percentage from this value using a variable interest loan.
You can use it in two ways:
- Line of Credit: A home equity line of credit (HELOC) is helpful if you need cash immediately. It uses your home as collateral. You can access these funds anytime and use them for anything. However, banks can seize your house if you fail to pay.
- Loans: A home equity loan is a second mortgage that banks provide in a lump sum. It has a fixed interest rate with no draw periods. Banks can seize your house if you fail to pay.
In refinancing, you can replace your existing mortgage with a higher amount that includes your recent home addition costs. You can also use it to have a lower interest rate than the original mortgage. Take note that it will also have a different interest length and payment period.
You can use a personal loan if you want a simple and quick cash loan. It is a straightforward process based on your credit history and income. The amount you can receive will be enough to pay for your home addition costs.
You’ll want to work with a reliable contractor to remodel your interior or exterior living spaces. Reliable Remodeling is one of the most trusted companies in the area. To schedule a consultation, call us at (205) 988-9194, or fill out this contact form.