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Mar
17

Paying for your Home Improvement Project

Paying for your Home Improvement Project

Home improvements cost money whether you just want to make your home more attractive or have bought a fixer upper that you plan to improve over time.

home renovations

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If your home improvement project is small then you wont need a lot of money, but if you are planning to do a large improvement then you will need to look at your financial options on how to make your home improvements happen.

Cash

If you have saved up money and have a substantial amount then you can pay cash. Keep in mind though that if you pay with cash you will lose the ability to invest that money and reduce the amount of money that you have for an emergency.

Credit Cards

If it is a big project then credit cards could be your worst option as the interest could be quite high and it may take you a while to pay off the balance. If you are able to pay the balance off quickly though like in a month or two and have a credit card that you earn rewards on then it could be a good option. A credit card that has 0% interest for the first year is also a good option as long as you can pay the balance off within the promotional period.

Short Term Loans

You are able to get a personal loan from a bank or credit union that can be repaid over a term of 24 to 60 months. The interest rates on these loans do vary and are usually lower than credit card interest rates.

Home Equity Loan

A home equity loan requires you to have sufficient equity and a great credit, but they do have low interest rates. Your home acts as the collateral for the loan so if you default on payments then you could lose your home.

Cash Out Refinancing

If you have had your home for a few years, have paid down your home loan balance and the value of your property has increased then a good option could be a cash out refinance. Bear in mind though that your payments could go up if your interest rate is lower as you are increasing the size of your loan.