It’d be nice to have new countertops in the kitchen and bathroom. Maybe it’s time to change the cabinets in those rooms to something more modern looking, right? And perhaps this is the year when the house gets all new carpeting and/or wood flooring… All of these projects cost money.
What are some ways to finance home renovations?
Many people who don’t have the cash on hand to pay for home renovations end up refinancing their mortgage in order to pay for the work done to their home to make it nicer. This is the number one way people afford and accomplish desired home renovations.
Besides refinancing the mortgage, there’s also the option of going for a home equity line of credit, drawing money out as needed and paying it back when possible. As long as minimum monthly payments can be made, this is a viable option. Equity lines are typically good for ten years and renewable, too.
Consider a home equity loan. It’s where you’re borrowing a fixed amount of money and paying it back in a “fixed” way over time. Many home equity loans have fifteen year terms, though shorter ones or longer ones are available. Home equity loans are also known as “second home loans” and especially make sense if they have a very low interest rate and one doesn’t want to refinance their first mortgage. Home equity loans are good for people who don’t like having to deal with adjustable rates, and they’re cheaper than construction loans.
Should you want to build a house or make major renovations (such as room additions) then you might consider construction loans. These can get a bit complicated, as they’re hard to find and need to be managed. Money gets released as stages of work get done. Generally short-term, they’re typically refinanced into a traditional mortgage loan once the home and/or renovation is complete.
Besides loans, some people use their credit cards to help pay for home renovations. While a fee might be incurred for cash advances, using a credit card for “smaller amounts” to buy materials, as needed, can help people build up their reward points on the cards– a nice bonus.
Did you know that most 401(k) programs allow people to borrow from the account and then pay the money back over a certain amount of years? Typically this is done through payroll deduction.
Options For Retirement Aged Homeowners
For those over the age of 62, consider a reverse mortgage. With this option, the money doesn’t have to be paid back until the home is sold or the inhabitants move out of their house.
Finally, there’s always the tried-and-true way of saving up cash over time. You can do this by placing a “home renovations” jar on the kitchen counter and every time you come home from somewhere with loose change in your pockets you just add that money to the jar. Furthermore, you can decide to set aside 10% of your weekly income to “the cause.” By doing this using actual cash– dollars and cents– it’s a tangible way to see how you’re progressing toward the final goal. It takes time and discipline, but it is doable.
Home renovations are usually done when people feel like they’re getting too cramped and running out of space and/or they visit others and say, “Why don’t we have what they have?” If you plan to be in your home for some time and want to enjoy it more, or you’re thinking of selling and would like to wow potential buyers with “newer” looking rooms, home renovations make sense.
In the Tallahassee area, Reynolds Home Builders is known for quality home renovation work. From helping people design, create and build custom homes to doing the little things that can literally transform the look and feel of a house, Reynolds is efficient, friendly and hardworking. Reynolds also does home additions, sunrooms, screen rooms, and the ever-popular kitchen and bathroom remodels. If you have an older home that needs some renovations to make it look and feel more modern and efficient, don’t hesitate to call Reynolds Home Builders at 850-508-5076 to discuss your desires. It should be noted that Reynolds doesn’t charge anything for an estimate/written proposal.