A home improvement loan can open up new possibilities for your property. It can give you the funds you need to move forward with making your dream a reality and allows you to maximize the potential in your current property by financing updates and upgrades.
Home improvement loan terms begin at four years and vary depending on how much you owe on your property, the cost of your proposed improvements, the expected value of those improvements, and the total property value.
There are a number of ways to finance home improvements:
- Refinance your mortgage. This is the best option for homeowners who would benefit from refinancing with a lower interest rate. Avoid spreading the cost of the improvements over more years than the renovation will last.
- With a home equity line of credit, you draw out money as you need it and pay it back at your own speed, as long as you make at least minimum monthly payments. You don’t have to pay interest until you use the money.
- Home equity loans let you borrow a fixed amount and pay a fixed payment over a certain amount of time. The limits are based on the equity you have built up in your property.
- A construction or renovation loan is used to build a house or make major renovations. These can help if you are building a major addition that will cost more than the equity you have in your home.
- Federal Housing Administration (FHA) 203k loans are typically used to buy a house that requires a lot of repairs, but they can also be used for refinancing. The requirements are similar to those of other FHA loans.