5 Simple Steps Toward Financing Your Summer Home ProjectsFamily Home Plans
Practically every homeowner has a dream remodeling project they’d like to complete. Maybe you hope for a modest update of an outdated kitchen, or perhaps you’re ambitiously aiming for a complete large-scale renovation. Unfortunately, such remodeling projects aren’t cheap, and it can be very difficult to save or acquire the money you need to make it a reality. That, however, does not mean it’s impossible. With careful planning and a bit of resourcefulness, you may be able to pull off your summer remodeling project more quickly than you thought possible.
Budget and Plan Carefully
Like any large project, a home remodel should begin with thorough planning and a detailed budget. Begin by deciding precisely what you hope to accomplish with your remodeling project and how you intend to put it into action. Are you renovating for your own enjoyment or to increase the value of your home? Can you receive tax credits or other incentives for certain aspects of your remodel? Check Energystar.gov for examples of improvements that can net you tax breaks. Additionally, take the time to calculate how much you can realistically afford to pay. Though there are many options available for funding, they won’t help if you can’t realistically afford to pay them back.
Consider a Credit Card
Do you have a credit card with a low interest rate and a strong credit line? While it likely won’t be ideal for larger purchases, a credit card may be a viable choice for materials and other, smaller costs. Before deciding to use a credit card, however, bear in mind how long it will take you to pay off the balance and factor in the associated interest.
One potential benefit to using a credit card? Reward points, cashback and other special offers may help you recoup some small portion of your expenses.
Shop for a Loan
The range of loans available to the average homeowner can be overwhelming, but the number of options means you’re likely to have several good options from which to choose. For major renovations, a home improvement loan or a construction loan may be an appropriate choice. These loans use the appraised after-renovation value of your home to provide you with additional funds, but they often have strict requirements. Personal loans are an option as well, provided you have the collateral to secure them. Be sure to shop around at banks, credit unions, finance companies and brokerage houses to determine the best loan for your particular situation.
Use Your Mortgage
If you aspire to improve the look or function of your home, it makes sense to use the equity in your home to accomplish it. This can be done in several ways, with the most popular being a home equity line of credit and a home equity loan. A home equity line of credit is a flexible credit line that is often established as up to 90 percent of your home’s value. The advantage of this credit line is that it can be borrowed against and paid down repeatedly as necessary. A home equity loan, sometimes called a second mortgage, is a fixed loan that cannot be borrowed against but features a fixed rate.
Do it Yourself
While materials and supplies aren’t cheap, it’s often labor that accounts for a significant portion of the cost of remodeling. One way to cut costs is to tackle some work yourself, but you should do so carefully. Only attempt work that you’re confident in doing, because otherwise, you may end up paying a professional to correct any mistakes you’ve made. However, many minor repairs and improvements are well within the scope of the average homeowner, so don’t be scared off unnecessarily. Even small updates to a bathroom or kitchen can provide a whole new look at a reasonable price.
Home renovations often come with a substantial price tag, but that shouldn’t discourage you from aspiring to create the home of your dreams. As long as you’re realistic about what you can afford and what you hope to accomplish, a little planning and foresight can help you achieve your goals.
Contributing Author: Beth Lisanne is a freelance blogger and researcher. In her free time, she likes fixing old cameras and learning to speak new languages. She was born and raised in Michigan but now resides in Chicago, IL.