3 Responsible Ways to Finance a Home Remodel
Owning a home has long been the American dream. Of course, purchasing a home does not mean you can just rest easy in the belief there won’t be some major expenses coming down the road. In fact, a home is never really complete. There is almost always something that needs to be fixed or added to. However, that is part of the fun and excitement of being a homeowner. You might be at the stage now where you are looking to renovate portions of your existing home. That takes money, and you don’t necessarily want to break the bank to make this happen. With that in mind, consider the following three responsible ways to finance a home remodel.
Take out a Home Equity Line of Credit
This is perhaps the most popular type of loan that people take out when beginning a remodeling project. This financing option is available to you if you have equity in your existing home. If approved, you will be able to take out a certain percentage of that equity and use it for your home improvement projects. Keep in mind that your home is used as collateral for this loan. You do not want to miss payments. The upside to this loan is that the interest rates are generally much lower than what would be available with other loan options.
Participate in a Government Sponsored Solar Energy Program
Many homeowners today are looking to upgrade their home to be more environmentally friendly. If this sounds like the position you are in, then you will want to look into solar energy incentives that are offered in your area. These are often sponsored by state or local governments and can help to subsidize the cost of solar energy panels and other energy upgrades that you make to your home. There are also federal tax benefits available as well.
Home Improvement Loan
If you do not have equity in your home, you might want to look into the possibility of a Title 1 Loan. These are government sponsored loans that private lenders offer to homeowners. Homes that more affordable may have some issues. Say, you have a leaky roof and need a roofing contractor. You can get approved for up to a maximum of $25,000 to be used for home improvement projects. Repayment terms can be extended as far as 20 years, and the interest rates are generally quite good. This way you can get something in your price range without having to live in a dump.
While there are certainly other financing opportunities out there when it comes to remodeling your home, these three provide you with the lowest interest rates. You want to be responsible when taking out any loan where your home is involved. Remember to keep within your budget and to make timely payments on any loan that you do end up taking out.