If you have been living with cramped spaces, poorly-lit rooms, and not enough closet space, you can re-layout your existing house to get more out of it. Refurbishing your home can improve its aesthetics as well as its functionality. Leaky pipes, faulty wiring, and inefficient appliances can all be replaced in an overhaul. Renovating can turn a run-down cottage into your dream home.
Whether you plan to continue living in your home or sell it after, renovations are a great way to re-invest in your property to increase its value. Remodeling your home is a serious investment that you can personally benefit from and make a profit off.
Unless you have enough cash savings in the bank, to be able to do a major overhaul of your home you may need financing. Homeowners across the United States are continuously looking to update their living spaces or flip fixer-uppers into showcase steads. Lenders offer different types of loans that you can use to plow money back into your property. Here are some ways to get access to funds:
Use credit cards
If you have existing credit lines, your cards are the easiest way to finance your renovation costs. However, your funds will depend on your credit limit and how much you can pay back on your card each month. You can use credit cards for small rehab projects or phased renovation work. The problem with using your credit for renovations is if you use up all of your limits, you won’t have the flexibility to accommodate other purchases or emergencies.
Take out a personal loan
Personal loans are stand-alone deals that you can avail of at most financial institutions or major banks. You can get anywhere from $1000 to $50,000 to bankroll your remodel. It may not be enough to overhaul the entire house, but it may suffice for a kitchen update. Personal loans are easy to apply for; however, they have application costs, so you are already spending a small portion of the limited amount that you plan to borrow.
Get a home equity loan
A home equity loan leverages your existing mortgage’s principal value, depending on how much you have paid back on it. For example, if you have paid 30 percent on your $500,000 house to your lender, they can lend you back some of that 30 percent. Typically banks can allow you to borrow up to 80% of that principal amount.
It is a loan within a loan, and you can use the money for other purposes not related to your property. It offers lower rates than credit cards and personal loans; however, it involves serious risk. If you default on your payments, while still paying your original mortgage, the bank may repossess your house.
Try a HELOC solution
A Home Equity Line of Credit (HELOC) is a finance option that also uses home equity, but you don’t need to withdraw a large amount at a single point. You open up a credit line, mainly, that allows you to draw funds over an extended period.
Depending on how drastic your plans are, you can select any one of these options to raise funds for your renovation project. Remember that how much you spend on the work should still be within your means to repay the loans. Otherwise, it will become a burden instead of an investment.
Remodeling your home should improve your quality of life, or make it possible for you to profit by selling it. If taking out a loan will only increase your financial obligations, it would be wise to postpone the work for the time being.
Do you need help applying for a mortgage loan in LA? We offer fast financing so you can get the loan you need as soon as possible. Contact us today to discuss your needs with a loan officer and get mortgage rate quotes.