A Guide to Paying for Home Improvements
There are a few different ways to finance home improvements. You can use cash, a home equity loan, or a home equity line of credit. Perhaps you are getting ready to put your home on the market, or you simply want to upgrade it for personal enjoyment; regardless, there are a few excellent options for financing this endeavor without breaking the bank.
Home Equity Loans as an Option
If you have the cash available, that’s always the simplest option. However, if you need to borrow money, a home equity loan or home equity line of credit may be a better option. These loans are secured by your home’s equity, which means you’ll get a lower interest rate than you would with a personal loan or credit card.
One thing to keep in mind is that home equity lines and home equity loans of credit are variable-rate loans. This means the interest rate can go up or down, so you’ll want to be sure you can afford the payments if rates rise.
The Home Equity Line of Credit
There are some important things to keep in mind when considering a HELOC for home improvements:
• Your home equity denotes the differential between the appraised value of your home and the amount you currently owe on your mortgage. So, the more equity you have, the more money you can borrow with a HELOC.
• A HELOC typically has a lower interest rate than other types of loans, but it’s important to compare rates before deciding on a lender.
• You’ll need to provide proof of income and assets, and may be subject to credit approval.
• You’ll also need to decide how long you want to repay the loan – most HELOCs have repayment periods of 10 years or less.
Costs of Home Improvements
The average costs of renovating major rooms in a house can vary depending on the size and scope of the renovation project. However, in general, home improvement projects can be expensive. Some of the most common home improvements that people make, such as remodeling a kitchen or bathroom, can cost thousands of dollars.
Before starting any home improvement project, it is important to have a clear idea of what you want to achieve and how much it will cost. It is also important to budget for unexpected expenses, such as repairs that may need to be carried out once the renovation is complete.
Atlas Capital Solutions is a national leader in commercial financing. We work with businesses spanning all industries, as well as commercial real estate investors and developers, to provide the financing you need to thrive and grow in an increasingly competitive marketplace. We understand that securing the capital you need for your business or commercial real estate transactions can be challenging.