Home improvement projects are so exciting!
Choose the right project and you’ll see an increase in the value of your home. That means that the money you spend on the project doesn’t just disappear. You’ll see it again when it’s time to sell. Plus, you get the enjoy the upgrade for the time you live in the home.
But, depending on the extent of your project, it can get expensive. To that end, we’ve put together these 5 tips for financing your next home improvement project.
Check them out here!
1. Take Time To Shop Around
Research might not seem like too much fun. Especially when you just want to get started on an exciting project. But it will pay off big time in the end.
Take some time to understand what materials would be the right fit for your project. Keep in mind, more expensive doesn’t always mean better. In some cases, it may just mean prettier. Don’t let a fast-talking salesman talk you into a more expensive material that isn’t necessarily the best fit for your project.
The same goes for contractors. Take your time. Ask around and get estimates from a few companies.
Don’t go with the cheapest just to save money, but the most expensive isn’t necessarily the best either. Check out their past work to see if they’d be a good fit for your project.
2. Create a Budget
Before you start spending money, sit down and create a budget. What’s the most you feel like you can afford to spend? Will you have to take out a loan to do it? How big of a loan are you comfortable taking out?
Once you decide your max price, start comparing your budget with your research. Do you have enough money to buy that fancy bathtub you like? Or would it be smarter to stick with a less expensive model?
Take a look at the estimates you got from the contractors as well. Will they fit into your budget?
Keep in mind that home improvement projects almost always end up costing more than you think. It’s a good rule of thumb to add 15-20% as a buffer.
3. Home Equity Loan
One good way to finance a home improvement project is with a home equity loan. In short, this involves taking a second fixed-rate loan out on your home.
However, if interest rates are high at the time you apply, this might not be your best option.
4. Home Equity Line of Credit
You could instead take out a home equity line of credit. You need to have built up equity already in your home to qualify.
Rather than a lump sum, you get a line of credit that you can use as needed. This is a good way to keep the costs down.
Also, introductory interest rates are usually quite good. But they are adjustable and you never know what they could go up to before you finish paying it off.
5. Personal Loan
What if you don’t have much equity in your home? Or don’t want to take out a second mortgage?
A personal home improvement loan is a great way to go. There is no equity required and no prepayment fees. You can pay the loan back as fast as you like to save on interest!
Start Your Home Improvement Project
Now you’re ready to get started on that home improvement project. What an exciting venture!
So go ahead and check your rates and see what you qualify for. It wont affect your credit and will give you a good idea of what type of project you will be able to afford. We have lending partners ready to help with financing your project-no matter what type. One is sure to fit your situation.