Top Tips For Financing Your Much Needed Home Renovations
Whether you’ve been living in your home for a while or you’ve just moved into an old-fashioned (in all the wrong ways) property, then it may be time to consider some much-needed home renovations. Whether it’s something as simple as filling your home with 1930s doors, or you’re replacing the entire kitchen and bathroom, finding the money to cover the costs can be a struggle for most. However, we’re here to tell you that there are plenty of ways to get hold of the money you need. Find out how, below.
Use Stashed Cash
If you have savings that have been sitting there ‘for a rainy day,’ why not make that so-called ‘rainy day’ today? Of course, not everyone has enough savings to cover the costs of renovations, but even by using this to cover a chunk of the costs, you’ll be protecting yourself against taking out loans, credit or even affecting your home’s equity. It’s always sensible to wait until you’re stable enough financially to cover the costs without needing to borrow the money, so if you have the cash to use, use it.
Consider A Low-Interest Credit Card
As we mentioned before, not everyone has the cash to burn. Financing home renovations may take more than just dipping into a savings account, and for some of you in that situation, a low-interest credit card could be a solution. However, it’s important only to use what you can afford. In some cases, you could use a credit card to cover the cost of materials, if not the whole renovation. Be sure that you understand the fees and interest that you’ll face, and how long you have to pay back the charges.
Apply For A Personal Loan
To apply for a personal loan, you often won’t need any collateral. What you will need, however, is outstanding credit, so if you don’t have that, this option may not be for you. If you do have proper credit, applying for a personal loan is relatively easy, but it’s important to note that the pay-back period for these loans is usually relatively short. Given this shorter window, your monthly repayments could be more significant than any of the other options on this list, but there will be less interest to pay.
Use Your Home’s Equity
If your home is in need of a large-scale renovation, then tapping into the loan you have on your property could be the solution you need. Taking out home equity loans is a popular option, but one that requires careful thought! First of all, you need to understand just what equity is. For those that don’t, ‘equity’ is the difference between the bank’s valuation of your house, and any remaining amount of your mortgage that you still owe to them. You won’t be able to loan the full equity, but as a general rule of thumb among banks, provided you still have good credit, you should be able to borrow up to around 80%. Interest rates on home equity are generally lower too, so that’s certainly a positive!
Consider Refinancing Your Mortgage
Another efficient way of funding significant renovations is through refinancing the mortgage on your home. It’s a good idea to review your home loan every few years anyway, and by finding a more competitive deal on the market with a new lender, you could refinance your mortgage with much lower interest rates! Your monthly payments would decrease, which could save you thousands if you keep aside the money that would’ve otherwise have gone on the mortgage repayments.
If All Else Fails… Save Up!
If you really can’t afford to do any of the above options, it might be time to start a savings account. It could take you a while to build up enough to cover the amount that you need for your renovations, but the knowledge down the line that you’ve managed to pay for it all from your efforts and pocket without owing anyone anything is undoubtedly satisfying!
The option that works best for you is ultimately your decision, but hopefully, we’ve given you an oversight on where to start. From taking out personal loans to refinancing your home loan, getting the much-needed cash for equally needed renovations doesn’t have to be a struggle!