Having a home that you love and feel comfortable in is something everyone should have. But if your house is in desperate need of repairs or updates, that might be something you’re trying to prioritize. Unfortunately, repairs and renovations can sometimes be costly, especially if you’re focusing on a major area in your home. But if you’re looking for a few simple ways to fund your home repairs and renovations, here are some ideas to keep in mind.
Credit cards can be a great way to be able to get something upfront and pay it off later. There are plenty of zero-interest credit cards that you can apply to help you pay for your home renovations. However, it is extremely important to not use credit cards irresponsibly and accumulate a lot of credit card debt. Before using a credit card, you should determine how much the remodel will cost and figure out what you can afford. From there, you need to make a plan to be able to pay off the credit card debt every month. In doing this, you can ensure you get the money you need for your project without putting yourself in debt.
Home Equity Loan
For someone who has equity in their home, this may also be a good way to pay for your home project. While you do have to apply and qualify for a home equity loan, since it’s a second mortgage, this process may take some time to get through. But if you plan far enough ahead, you can get a large lump sum to use for your renovations and repairs—but it is important to note that home equity loans usually have higher interest rates than the first mortgage.
Do you have money in savings? If you do, this is perhaps the best route to take to help pay for repairs or renovations. Because you already have the money in your account, you don’t have to worry about going into debt or having to pay back a loan. If you have an account with money in it you were saving for something big, like home projects, travel, or a new car, you may be able to dip into this savings to give you the funds you need for your renovations. But you should always make sure you’re in a good financial position before taking money out of your savings account.
Hard Money Loans
If you have a property that you’re renovating to sell or rent out to tenants, you may want to look into hard money loans. A hard money loan is essentially a short-term loan that is funded by private investors. By choosing this type of loan, you don’t have to go through the long and painful application and qualification process traditional lenders require—residential hard money lenders can offer loans more quickly and usually lend money based on the property you’re working on as collateral. So if you’re looking for a quick and reliable way to get money to finish some repairs on a rental property, consider a hard money loan.
For major remodeling projects, like adding an addition or completing gutting and re-building a kitchen, you may want to consider refinancing your mortgage to help pay for expenses. If you have a good amount of equity in your home, refinancing can be a smart move—not only can you often get a lower interest rate when you refinance your mortgage, but you can get the equity from your home. So you’ll have a smaller amount to pay for your mortgage every month and you can get a lump sum to utilize. This may not be the best choice for small repairs and chances, like adding better attic insulation, but it can help with bigger projects.
Making repairs and renovations to your home can be a great way to ensure you truly love the space your in and add value to your property, too. So if you’re wondering how you’re going to pay for an upcoming home project, keep these simple options in mind.