If you are about to embark on a home renovation mission let us take you through a number of financing options along with some tips so that you get nothing but the best deal for you.
Apply for a personal loan
Personal loans come with the advantage of lower interest rates (usually) than other lines of credit such as credit cards. These can be paid over a predetermined period of time. You could even borrow more money after paying back the first loan if needed.
Avail a personal line of credit
If your renovation project is a long-term one you could consider getting a line of credit and use the money as and when needed. This benefits you as you don't have to pay a big interest but only for the money you use. You can keep borrowing money till you reach the max limit without worrying of re-application once the initial round of money is over.
Use up your savings or a credit card
In case you are working on your renovation mission yourself, it makes sense to buy the building/renovating materials required from your own savings, especially if it is a small-scale renovation. Alternatively, you can use the credit card to buy the same materials but ensure that the balance doesn't hang over your head for a long period of time as the interest rates can be a pain.
Home equity loan and Secured line of credit
Home equity loans and Secured lines of credit have benefits that are very much similar to that of lines of credit as well as loans. They also have the added benefit of preferred interest rates but set-up costs, as well as legal fees, will have to be borne by you while availing these.
You could opt for mortgage refinancing as it is of particular benefit when major and long-term renovations are underway. If you have a good mortgage broker by your side you stand a chance at getting better interest rates in this manner as opposed to a credit card or even a personal loan. The only downside is that mortgage refinancing involves set-up costs that have to be borne by you. To repay the loan is easy on the pocket as it can be stretched over a long time.
Financing renovations of a new home
If you are a new home buyer/owner and plan to do a major re-jig then it would be a great option to get the cost of renovation added to your mortgage. This will help you immensely as you get to pay a low rate of interest as compared to other loans.
Grant and rebate
The government and local bodies sometimes offer grants and rebates for renovations that are energy-efficient. It is good to have a look at these schemes and discuss with your mortgage broker if you are eligible to avail of these.
If you are looking at renovating your home and for ways to finance it, do not hesitate to get in touch with us. Our team will help you choose what is best for you have given your current situation.