No matter how long you live there, your home is likely to need some repairs, replacements and general maintenance performed to remain a beautiful, safe and healthy place to live. Even the most stringent of homeowners face these issues from time to time, so rest assured that this need is quite typical. Still, no homeowner is thrilled at the prospect of spending heaps of their personal funds to repair, renovate and maintain a home. The overall costs can be quite steep, depending on the nature of the work that needs to be performed.
At some point, you will need to find a way to pay for it all. We’re here to tell you how you can do exactly that.
Access Your Home’s Equity
If you are in a conventional mortgage, chances are you already have access to some of the equity that your home has accrued. If you’ve been in your home for a long time, you have even more at your disposal. Choosing to borrow against this equity is called a second mortgage and you’ve got two options:
- A home equity line of credit, or a HELOC.
- A lump sum private second mortgage.
A HELOC is especially handy for big renovation projects, as these projects are often comprised of multiple, smaller projects. You can withdraw the funds only as you need them, which makes paying for contractors, material and licenses a breeze. If you know how much your big project will cost you from the start, a lump sum equity loan can be much more manageable.
Consider Refinancing Your Home
Refinancing allows homeowners to renegotiate the terms of their mortgage while they pocket the difference between the first and second mortgage. Not only does refinancing allow you to access your home’s equity without putting your home up as collateral, but it also enables you to take advantage of lower interest rates.
Take Out a Personal Loan
Personal loans often have small interest rates and can be repaid over a period of one to five years. This can be a great option if you can promptly pay all of your monthly debts and revolving payments – with room to spare for an additional monthly payment, of course.
Loans of this type are easy to keep track of and can help you to finance big renovations and repairs without delay.
Dive into Your Savings
If your aim is to make your home the comfortable, safe and healthy haven to keep in your family for generations to come, it is absolutely worth making a personal investment here. Many homeowners who don’t plan to sell their homes prefer to use their savings and other bank accounts to pay for repairs and renovations – big and small – in lieu of taking on loan repayments. This is a more hassle-free method of obtaining funds, as you will not have to pay anybody back and don’t have to worry about interest rates.
Whichever method you choose, be sure that you will not be facing financial troubles moving forward. It will do you no favors if you take out loans or second mortgages that you simply cannot afford.