Financing Your Home Renovation
While many homeowners have a “wish list” of renovations that they would like to complete, one of the biggest drawbacks can be the cost. In some cases, it may make sense to dip into savings so you can quickly get the work paid off, without the need to pay more via interest charges.
In other instances, though, home improvements could require a larger dollar amount, so borrowing the necessary funds is the best route to take. Some of the most common options available for financing home improvements and updates include:
- Home Improvement Loan – Home improvement loans are considered “unsecured personal loans.” Therefore, there is no need to put your property up as collateral for the funds. The interest rate is typically based on your credit score. So, the higher your score, the lower the interest rate will usually be.
- Home Equity Loan – If you owe less than the value of your home, you have equity in the property – and you may be eligible to obtain a home equity loan. These loans use your home as collateral. Therefore, if payments are missed, it is possible that the lender could foreclose.
- Home Equity Line of Credit (HELOC) – A home equity line of credit, or HELOC, provides you with a certain dollar amount that can be accessed – but you don’t have to use it all. As an example, if your home equity line of credit is $20,000 but you only need $5,000, you could write yourself a check for $5,000 and leave the remaining $15,000 in-tact. This arrangement is often referred to as “revolving credit,” where you take only what you need.
If your home is in Orlando or the surrounding Central Florida area, and you’re ready to move forward on some updates – or even a major renovation – give LP Design and Renovation a call. Our professional designers can help you to draw up a plan, while also keeping your budget in mind.