Sometimes, your home needs an extra touch to make it look great. The beauty of your home can motivate you to do amazing things in life. When your family and friends visit, the first thing they notice is your home. Nobody wants to have a dull home, and that’s why more homeowners are trying to remodel their homes to make them more appealing.
But, how do you remodel your home without straining? Home remodeling shouldn’t take so much of your emergency funds or savings. With the right strategy, you can remodel your home to your taste without hurting your pockets. Here’s is how to pay for that home remodel you are craving without tapping your equity.
Home remodeling will help improve the value of your home significantly. This is especially important if you want to sell your home in the future. Before you take home renovation loans, you should consult widely with professionals so that you are sure of the best type of loan to take.
You should go for loans that won’t eat up so much of your monthly premiums. Plus, you should only go for home remodeling projects that are essential. Avoid extravagant expenditures that won’t add any significant value to your home. Some of the most common home remodeling loan options include:
However, if your home needs minor repairs, consider going for the streamlined loan option, which covers home remodeling projects of below $35,000. You can also opt for a 401(k) loan for home improvement, which has a lot of similarities with the FHA 204 (k) home remodel loan.
Can you get a personal loan after buying a house? Well, you can get personal loans if you can prove that you are the legit owner of that property. Go for personal loans if you want to make quick and urgent repairs to your home. These loans have less time-consuming appraisal and underwriting processes. Most borrowers can get the loans in less than a week if they have good credit scores. Borrowers with poor credit scores get lower personal loan rates. However, personal loans have higher rates of 6-36% depending on the lender. Just make sure you go through the terms and conditions of each lender before settling on a specific one. For these types of loans, homeowners should go for projects that don’t cost more than $20,000 because they have a shorter repayment period. You can take advantage of lenders who let you prequalify for personal loans and determine if you’re comfortable with the monthly premiums they’ll require you to pay.
Many homeowners remodel their homes using their own money. The beauty of using your savings for home remodeling projects is that you’ll do interest-free repairs. However, before undertaking the home repair projects, ensure your savings will cover them without affecting other essential bills that you should pay. You can use about 25% of your savings to cover your home remodeling projects. Any excess of that can put you in a financial crisis that you could otherwise avoid.
Doing home remodeling projects using credit cards can be quite expensive. However, with the right plan, you can make it work for you. Some credit cards have offers and rewards on certain home renovation purchases. Take advantage of that by purchasing your supplies from stores that have such offers. If you have excellent credit scores of 690 FICO or higher, charging a credit card may be an excellent way of completing that home remodeling project. Just ensure that you avoid extravagance and go for projects that will improve your home value.
Some lenders offer government-backed loans like Title 1 loans that help borrowers buy home appliances, make their homes energy efficient and more accessible. You can borrow $25,000 or less for a single-family home with a flexible repayment plan of 12-20 years. Loans above $7,500 require homeowners to use their homes as collateral. Plus, you should prove the collateral has been your home for more than 90 days. It is wise to check with the Housing and Urban Development website to know the legit lenders and know their loan appraisal criteria.
Equity home loans are excellent if you want to do long-term home remodeling projects. Borrowers get this loan in a lump sum, and they can then repay on the agreed number of years with regular fixed monthly installments. One advantage of equity home loans is that market fluctuations don’t affect them. Before applying for this loan, do an intensive analysis of the repairs your home needs, the cost of such maintenance, and the projected value the repairs will add to your home. However, make sure that you pay your fixed monthly installments on time because your home is collateral. You can also opt for a VA home loan for energy-efficient improvements.
There are several ways to use to do those home remodeling projects you are craving. Just ensure that the remodeling projects don’t take much of your money and make you strain in the long run. When going for home renovation loan options, make sure that you only go for lenders with the best offers. Also, ensure that you pay your loan on time to avoid any major inconveniences.