Best Way to Finance Home Improvement Projects?
Home improvement projects do come with a cost. Most of us take out a loan to pay for them. You’ve probably received “you’ve been approved for a personal loan!” letters in the mail or have been told you can refinance your mortgage and take money out for whatever you want. As with other major financial decisions, however, it’s really worth the time to understand your different choices so you don’t regret it in the future
Cash is King!
Cash is usually preferable to debt. However, with the average major kitchen remodel could take years before you’ve saved enough to do your projects and actually enjoy the results. For small projects, however, if you’re able to save enough in cash, this is probably the best way to go.
You could also do a combination of cash and one of the other financing options to reduce the amount you pay in interest.
Home Equity Line of Credit (HELOC)
With home equity lines of credit, instead of getting all the money you qualify for at once, you have a revolving open credit line, much like a credit card. This makes more sense if you want to borrow money periodically (e.g., projects every couple of years) or just want to have access to more money—but not necessarily take it out all at once.
Which type or combination of financing methods that is best for you…depends on your situation. The types of financing for home improvements vary quite a bit. It pays (or rather it saves money) to do your homework … see other creative financing types in the full article.
<read full article>
Home improvement projects do come with a cost. Most of us take out a loan to pay for them. You’ve probably received “you’ve been approved for a personal loan!” letters in the mail or have been told you can refinance your mortgage and take money out for whatever you want. As with other major financial decisions, however, it’s really worth the time to understand your different choices so you don’t regret it in the future
Cash is King!
Cash is usually preferable to debt. However, with the average major kitchen remodel could take years before you’ve saved enough to do your projects and actually enjoy the results. For small projects, however, if you’re able to save enough in cash, this is probably the best way to go.
You could also do a combination of cash and one of the other financing options to reduce the amount you pay in interest.
Home Equity Line of Credit (HELOC)
With home equity lines of credit, instead of getting all the money you qualify for at once, you have a revolving open credit line, much like a credit card. This makes more sense if you want to borrow money periodically (e.g., projects every couple of years) or just want to have access to more money—but not necessarily take it out all at once.
Which type or combination of financing methods that is best for you…depends on your situation. The types of financing for home improvements vary quite a bit. It pays (or rather it saves money) to do your homework … see other creative financing types in the full article.
<read full article>
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