Are you racking your brain for ways to finance a home improvement? Join the club. With home values continuing to rise, 2020 could be one of the most active years of the last two decades for renovations. It appears that some of the recent new home sales decline means that lots of folks have decided to stay put and improve the current living space. The question for many, however, is, “Where will we find the funds?”
There are plenty of options to map out a strategy for funding a renovation. Even for homeowners who don’t have much cash on hand, where there’s a will, there’s a way. Getting low, or no interest loans, HELOC’s, refinancing student loans, using sweat equity and other approaches are all part of the picture. Here are five of the most popular ways to fund an upgrade to your house.
Shop for a Zero-Interest Renovation Loan
Zero’s, as they’re called in the business, are hard to find. What are they? Zero interest home remodeling loans are available from some financial institutions to owners who have excellent credit and higher than average income. If you can snag one of these loans, you’re in luck because they are one of the lowest-cost ways to pay for the improvements you want to make. Just be warned that consumers who apply for are turned down, so don’t stop here.
Take Out a Home Equity Line of Credit
A more probably route for success is a home equity line of credit, also known as a HELOC. If you have enough equity in your residence, have otherwise good credit and can show a stable source of income, a HELOC can be a smart, lower cost way to pay for the renovations you have in mind. A warning is to be careful to spend your funds only for the intended purpose and not something else. This is easy access to a lot of cash at once, so some folks are tempted.
Refinance Student Loans
One of the wisest methods for getting your house fixed up just the way you want it is student loan refinancing. Not only will you have longer to repay the entire education debt, you’ll likely get a slightly lower interest rate and end up with lower monthly payments. That extra cash can come in handy when you need to cover all those extra expenses that seem to pop up with renovation projects.
Use Sweat Equity
Check with your local hardware store and see about the cost of supplies. If you have the skills to do some of the work yourself on a home improvement, you can save a ton of money. But keep in mind that you need to possess actual skills to make this method work.
Liquidate Your Assets
For a minority of homeowners, good old liquid assets are the primary way to pay for the job. That means cash and cash equivalents, like stock and investment funds that have not been marked for retirement or education. It can also include items like extra vehicles you can sell quickly for a decent amount of cash.