Are you looking around your home thinking about all the things you wish you could do to improve its overall appearance and functionality? Well, it may be time to take that leap forward and start remodeling.
Home remodeling can be costly, but there are financial options for you. Consider the following ways you can finance your home remodeling project(s).
- Energy Efficient Mortgages
If you’re looking to make some energy efficient changes, consider this one. You’ll have to be approved by Fannie Mae under their energy efficient standards.
- Construction Loan
With this loan, you only pay interest until the work is complete. After you’re done remodeling, you pay you original mortgage plus the amount that your remodel cost.
- FHA 203(k) or Cash Out Financing
With this, you take your current mortgage and add in how much you spend on your home remodel. The amount you receive depends on how much your home will be worth after you’re done remodeling.
- 401(k)
You can use your retirement fund for home remodeling. It’s risky though because if you lose your job, you lose your investment too.
- Home Equity Line of Credit
With the purchase of your home, you may have received a credit card that you can use based on your home equity. If you use this, you will most likely have an adjustable rate, which could mean big additions if rates go up. You usually have about ten years to pay off your balance.
- Home Equity Loan
A lot like a second mortgage that you can pay back in a 15 or 30-year term with a fixed mortgage rate. Expect to pay a little more for the mortgage rate, however.
- Title 1 Loans
If you don’t need more than $25,000, this may be a good finance home remodel option for you. You won’t be able to get a tax deduction on the interest but you can negotiate the interest rate with the lender.
Photo Courtesy of: rezlab on flickr
