Coming up with a 20 percent down payment on a home can be difficult, especially for first-time homebuyers who don't have the equity that existing homeowners may have when selling one home...
Home Improvement Loans: Financing Options
One of the best ways to add value to your home-and enhance the quality of life inside-is through a home improvement project aimed at sprucing it up or adding amenities. Some of the most popular upgrades also return the highest dollar-for-dollar return on your investment. Remodeling a kitchen, adding a bathroom, or replacing an aging roof, can add equity now, and market value later, if you decide to rent or sell your property. Financing options are numerous, and lenders offer a variety of payment options, rates, and terms.
Here are three simple ways to finance home improvements:
Home improvement mortgage refinance
Many homeowners are refinancing to lock in attractive long term fixed interest rates, and using the extra money to pay for remodeling projects. With this type of home improvement loan, you can schedule repayment for 20 or 30 years into the future, and interest is tax deductible. But you'll be repaying the money slowly, and the accumulated interest can be significant.
Home Equity Loans
Borrowing against the value of your home is one of the smartest ways to finance home improvements. This technique leverages the existing value of your home to generate even more cash, and provides self-perpetuating equity. Home equity loans can be either a fixed-rate loan, or a revolving line of credit (HELOC). If you default on your payment, you run the risk of losing your home, so pay these loans back in a responsible manner.
Ordinary consumer bank loans are handy as home improvement loans, especially for those who need to borrow relatively small amounts of money without much paperwork or delay. But interest rates are sometimes less competitive, and loans usually need to be paid back within a few years, rather than a few decades.
Be sure to borrow enough money to cover unexpected expenses that might inflate your budget along the way, and choose the financial options that suit your budget and timeline best. Look for monthly payments that are manageable, and an interest rate and schedule of repayment that meets both your short and long term goals.
Older Americans have the AARP to advocate on their behalf. Now, a group of housing industry veterans has launched a similar organization with the stated goal of looking out for the interests...
With $28,000 in student loan debt when he graduated from college last spring, Patrick O'Keefe took a step that not many students would take when looking to get out of debt: He signed up for a...
When you buy a home as an unmarried couple, getting approved for the mortgage is only half the challenge. You also want to be sure to set up the ownership and financial arrangements so that...
Latest from our Contributors
Browse Mortgage Rates
Browse our comprehensive guides to popular topics related to mortgage and personal finance.