Have you decided to remodel your home and realized that it’s going to cost more than you bargained for? As with most things, there are always hidden costs that seem to sneak up on you out of nowhere.
The biggest issue with this is obviously figuring out how to finance everything. What do you do? Do you put it on your credit card and hope for the best? Here are a few financing options to consider before plunging into the deep end.
Payday Loan
This is great for when you run into those unexpected little snags and need cash quickly. In about 5 minutes, you can get your online payday loans approved. Once everything is approved it should appear in your bank account within less than 24 hours. How is this possible? There is no need for a credit check, so once you meet the minimum requirements your loan is approved.
The requirements are simple:
- You must be 18 years or older
- You must have a government-issued ID
- You must have an active bank account
- You must have an income
These sorts of loans are typically for small amounts and those unexpected expenses that need to get paid for quickly. The amount that you can borrow depends on how much you make at the end of the month, so keep that in mind.
Personal Loan
Another option for people who are not borrowing large sums of money is a personal loan. These loans are typically for smaller amounts of money and can be paid back quicker than if you were to go for a full refinance. The repayments are much lower than a credit card but higher than a mortgage.
Construction Loan
If you are not familiar with a construction loan, be sure to ask your bank about it. This loan can be processed on the premise that the renovations will add value to the home in a monetary manner. They are, however, quite tricky to secure and even trickier to manage. They are highly regulated so that the funds cannot be misappropriated, and the contractor will receive payments in stages based on the construction. This means that when the money has run out for a certain stage, it has run out. This means you need to either wait or apply for the release of funds before the next phase has commenced.
Cash-out Refinance
This has become an increasingly more popular option for homeowners. With changing interest rates a refinance could mean that you pay less than you were initially on your mortgage. This is a great option for financing those building costs and paying them back in small repayments. When you sign for a “cash-out refinance” it basically means replacing the mortgage you currently have with one that is entirely new. This will, however, mean that you will be paying it back for quite a long period of time, but many opt for this option as the money goes directly to you as the homeowner and is not controlled by someone else.
HELOC
Lastly, we have a Home Equity Line Of Credit. This option basically entails that you borrow against the equity of your home. This is a great option if you have enough equity to bargain with. A common error that people make with this is forgetting that the initial minimum repayments are only the interest. You will start to pay for the loan later. You also only have 5 years to repay the loan. This means you cannot stick to the minimum payment and must pay both the principal and the interest timeously.
Borrowing money can be stressful, but it doesn’t have to be. We hope that these different options have helped you to see that there are so many different avenues that you can take to achieve your goals.
Read more:
Remodeling Your Home? Here Are Several Financing Options