Invest in Your Home: 4 Ways to Fund Your Major Home Renovations

Invest in Your Home: 4 Ways to Fund Your Major Home Renovations
  • Opening Intro -

    When you purchase a home, you commit yourself to creating a habitat that is solely your own.

    Everything you do, plan, and invest involving your home should contribute towards the overall value of it.

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The problem that most homeowners face when it comes to performing renovations, especially major ones, is the cost of those renovations. Some homeowners relent on improving their figurative castle because it would cost more than just a simple arm and a leg.

The good news is that you can solve your renovation funding dilemma. Let’s examine four unique ways you can pay for your next major renovation.

1. Borrowing from a Lender

The easiest way to appropriate funds for your home renovation is to borrow the money from a lender. Low-interest loans do exist to fund smaller renovations.

The average cost of a deck addition, which is about $10,000 to $15,000, can be covered by a 5- to 10-year loan. You can even utilize a second mortgage to pay for your renovations, which in turn allows you to pay for this costly addition while the value of your new addition appreciates in value.

2. Refinance Your Current Mortgage

Although a second mortgage is often more convenient, it is not always simple. Having to make two payments a month towards two separate loans can quickly become more than just a simple nuisance.

If you wish to borrow more money without complicating your mortgage, then you should consider refinancing your current mortgage. Austin refinance lenders will often allow this when you have a certain amount of equity built into your home.

This option serves people who have had their home for at least five to ten years better, and it may be optimal for people who are nearing complete repayment on their loan. The latter is more advantageous as the average payment may be able to be reduced even after the cost of your renovation has been added.

3. Factor in the Cost to Your Initial Mortgage

If you’re purchasing your first home, it is possible to factor in the cost of immediate renovations into your mortgage. Some lenders will work with you during the appraisal process to determine how much extra you may need to have to purchase your home.

The only thing to keep in mind is that not all lenders will support factoring the cost of major renovations into a mortgage initially. They may require you to provide a certain amount of money before they are willing to do so, or they may simply make you wait.

4. Home-Equity Loans

When you have a certain amount of ownership in your home, which is known as equity, certain lenders will make you loans based upon the ownership. These home-equity loans act much like traditional mortgages while being secured by your house.

While there are many forms for these loans, the most common applies a secondary lien to your home with the lender of your primary mortgage as the first. These loans can give you superb interest rates while allowing you to fund your renovations.

Many Options for Funding Major Renovations

The best part about major renovations is that there are actually many ways to fund them. Most lenders have fairly easy requirements to meet, which means that acquiring that funding is easy when you have the means to repay it.

By conferring with lenders, you may find additional ways to fund your home’s major renovations. You need only continue looking to ensure the right funding option is available for you to use.

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Categories: Home Financing

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