Every year nearly $350 billion is spent by Americans on home renovation projects that will bring them one step closer to living in their dream home. Although some homeowners only need to engage in small renovations in order to be completely happy with their abodes, large-scale, expensive renovations are needed for others. If you don’t have a pile of money at your disposal to pay for the renovations, you will have to seek out other alternatives to redo your kitchen, refit your bathroom, or replace all your floors. Here are a few funding methods that are worth considering prior to taking on a big renovation project.
Consider refinancing your home
With 30-year mortgage rates having decreased once again, now may be a good time to refinance your house to fund the renovations that will turn it into your dream home. Your repayment rates will depend on a number of things, including the state you are in. The states in the western part of the USA, including New York (4.59%), Hawaii (4.56%), and Alaska (4.49%) typically have the highest mortgage fees while Kansas (3.35%), Arkansas (3.42%), and Maryland (3.35%) sport the lowest fees. If you find yourself in Tennessee, for instance, you can enlist the services of Nashville mortgage lenders that will charge you in the region of 3.52% interest on a 30 year fixed mortgage.
Apply for a loan
If you have a good credit score, you have the option to apply for a variety of loans that can help finance your renovations. Home improvement loans are basically unsecured personal loans that can be used to pay for your revamp. These loans are typically offered by credit unions, online lenders, and banks. As the loan is unsecured, you do not have to use your house as collateral. This is one of the fastest ways to secure financing as money is often available within 24 hours of approval. Other types of loans to consider include personal loans and government loans. One of the most popular types of government loans is a HUD Title I Property Improvement Loan which allows a homeowner to borrow up to $25,000 without having any equity in your house.
Go on a saving spree
If you don’t want to refinance your house and do not have a good enough credit score to enable you to get a loan, you may have no other option than to save up for your renovations. Open a savings account that is specifically for your renovations and then formulate a strategy that will help you maximize your savings. Start by looking at how you can save money around the house by decreasing your utility bill and unnecessary expenses. You may also want to consider additional income streams to help you reach your savings target faster
Renovating your house to turn it into your dream home can be a very exhilarating and expensive experience. Thankfully, there are various financing options available that can help you turn your dream into a reality.
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