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Working on a home remodel can be a big project. You may have to spend time outside of your home while the work is being done. You may have to rely on a generator for power if you’re having major work done to your home.
Whatever the case may be, you need to make sure you’re financially prepared to handle the full scope of the project. Take a moment now to read through a few tips on financing your home remodel.
Save the old fashioned way
The simplest way to fund your home remodel is to take the time to save the money the old fashioned way. Work hard. Set a special place in your budget, and open up a house savings account to store the funds.
You may have to wait a while, but there’s something special about knowing you aren’t accruing any extra debt to remodel your home. It’s easier to enjoy the finished product when you don’t have to pay payments on it for many years to come.
Consider a home improvement loan
A home improvement loan is typically an unsecured loan offer you get from the bank or a credit union. It’s unsecured, so you don’t have to put your home up as collateral. However, there can be a few drawbacks from this type of financing.
Depending on the look of your credit history, you could have some pretty hefty interest rates attached to your home improvement loan. You’ll also have less time to repay the loan, so keep that in mind when deciding on an amount.
Home Equity Line Of Credit
HELOC funding is backed with your house as collateral. The obvious drawback there is that you could lose your home if you don’t make the payment.
However, HELOC funding usually comes with a much lower interest rate. If you choose to go the route of a home equity line of credit, you must first make sure you have 15 to 20 equity in your home to qualify.
Credit cards
If you have a few good credit cards, you could put the cost of a smaller project on your cards. Just be wise about the charges you’re making.
Don’t get yourself in a shaky financial position if you can avoid doing so. Make certain you’ll have the income to cover the repayment of the charges without issue
Try getting a government loan
There are a few different government loans that could be of some assistance when you’re working on fixing up your home. Look into a HUD Title I Property Improvement Loan. This loan offers a cap of $25,000, and you aren’t required to have built any equity in your home.
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