Home improvements, aside from generally improving the appearance of your abode, can also dramatically increase the value of your property. If you are thinking of remodeling your property but don’t have an idea where to tap the fund to cover the improvement expenses, this article helps you get an idea of just where to look to get the job done.
If you have enough cash in your savings, you may tap into that reserve and use the money to fund the needed improvements. No need to go through all the hassles of financing. However, a downside to this is missing on the deductibles that you could’ve benefited from home loan interest.
If you have significant equity in your property, you can refinance your current mortgage and take out part of that equity as cash. There are no restrictions as to how you use the proceeds of your cash-out refi, just like a personal loan. If you got your original mortgage at an interest rate higher than it is now, you can even lower your monthly payments, given all the other factors of your finances remain constant.
Today, you can borrow as much as 70 to 80 percent of your home equity.
A Reverse Mortgage
A reverse mortgage is available to seniors aged 62 and above. It is a form of home equity loan that allows you to tap into your home equity but instead of paying monthly for it, it is actually the bank that gives you money throughout the life of the loan. A reverse mortgage is only repaid when the owner of the home moves or passes away.
Government Home Loan Programs
Various HUD programs exist to help homeowners realize their objective of improving their homes. These financing programs come in different types, usually catering to specific demographics such as senior citizens or veterans. There are also programs for native Americans and those living in historic homes.
Free Energy-Efficient Upgrades for Free
Another less-known option is getting free financing via assistance programs that champion energy efficiency. These companies may be rare but is definitely worth looking up in your state. You can inquire from your local energy provider about such incentive programs.