Do you ever look around your home and find yourself thinking, “I love this place, but I really wish I could update this room or change the layout of that room”? If you answered yes, it might be time to consider a home renovation. If you’re ready to take on that kitchen transformation in Arlington Heights or that bathroom update in Naperville, but you’re not sure how to finance a home renovation, we’ve got the answer.
While this might not be an option for many people, one way to pay for your home renovation or home addition is with cash. If it’s possible, you can pay the design and build team up front, or you can work out a payment plan to pay off the project in installments as the work progresses.
Another option for home renovation financing is to take out a personal loan. You might be able to put some cash down as a downpayment and get a line of credit for the rest. If you choose this route, be sure to run your credit first to make sure you can get approved, and compare options so you can get the most reasonable interest rate.
Since mortgages are long-term payment plans, you might have the option of a cash-out refinance. This new loan will replace your current mortgage and provides you with the funds needed for your bathroom remodel, basement renovation, or other project. This option typically provides a lower monthly payment than a personal loan.
If you’ve lived in your home for a while, you can look into taking out a home equity loan or a home equity line of credit (HELOC). A home equity loan is a second mortgage. They typically have a fixed interest rate and you get the money in one lump sum, which usually has to be paid back within 15 years. This can be a good option for projects with a set price.
The other option is an equity line of credit, which is similar to opening a credit card. This is a good option if you’re spacing out projects over a couple of years and don’t need the lump sum all at once. These also must be paid back within 10 to 15 years, on average, and they have adjustable mortgage rates.
If you’re ready to get an estimate on your home renovation or you want to learn more about how to pay for a remodel, reach out to the LaMantia team in Hinsdale. We’re happy to help, and we offer free consultations.