With spring approaching and ample time to tackle home projects, now is the time to consider what you want to update in your rental home and how to budget for the improvements. Create your to-do list and start to think about the best way to pay to create your dream home because there are many options to contemplate when it comes to budgeting a spring home improvement project!
Check Your Equity
If you’ve owned your home for some time now and have equity in it, looking further into loan options might be a good starting point, depending on the project you’re looking to tackle. Bigger renovation projects like kitchens, bathrooms, or layout redesigns can be expensive over time. It may be worthwhile to question if you should refinance your mortgage loan. Refinancing can help you lower your monthly payment so you can save up more money or reduce your interest rate. It can also allow you to get cash for your equity now to put towards a home project.
Another option is a home equity line of credit, which allows you to take out a credit line against your home to use as you wish, like for home renovations. The amount will depend on your credit score and the equity you own, so the first step would be to meet with the bank that holds your mortgage loan to learn more about your options.
Saving money over time to complete your renovation may be the smartest way to fund the project, but it takes a lot of planning. If you’ve been thinking about the to-do list you want to tackle since fall, then you may have had the opportunity to save up some money to cover materials or labor. Like mentioned above, there are other loans you may be able to refinance to save money on your monthly payments. For example, refinancing a student loan might lower your interest rate so you can allocate that extra money to a savings account. However, if you’ve just recently decided you want to make upgrades around the house, you can use some of your savings. All in all, there are a number of ways to fund home upgrades, so don’t sweat it if you haven’t created a savings plan yet!
Personal loans or credit cards can be used to fund parts of your home improvement; this avenue may be especially helpful if you have saved up some money for your renovation project. It is also helpful for people who don’t have much equity in their home. For example, if you recently bought your house and need to make renovations in order to make it more livable, this could be a viable option. Personal loans and credit cards also give you the freedom to “shop around” so you can find the interest rate and repayment option that works best for you. However, the interest rate may be higher than what you’d get with a home equity loan or a refinance.
Prioritize Your To-Do List
Once you’ve decided on the payment option that’s best for you to complete your home project, it’s time to decide exactly what you’d like to upgrade around your house and what you should prioritize. If you know that right now you have the time to commit to upgrading your house, then maybe consider tackling a big project like a kitchen remodel or new floors. It’s best to decide this before you go to the bank or start saving up money so you know exactly how much money you will need and when.
It’s a great time of year to organize your finances and do home projects to feel refreshed around the house! If you can obtain a loan or personal line of credit right now, then you can get started on renovating your house sooner rather than later!
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