Cash Concerns: How to Get a Loan for a Home Renovation Project
Wednesday, November 29, 2017, 6:00 AM | Leave Comment
If your attic is moldy, the basement is wet or you need more space, it may be time to invest in a major home renovation project.
There are ways to educate yourself on renovation for yourself and as a career through resources like Rules of Renovation Reviews. However, such a project could cost thousands of dollars to complete even if you do it yourself.
What are some options that may make it possible to get the money that you need to get the work done?
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Apply for a Home Equity Loan or Line of Credit
A home equity loan allows you to borrow against the collateral in your home. The house will be used as collateral, and the amount that can be borrowed depends on how much equity is in the home. Home equity lines of credit are a combination of a traditional home equity loan and a credit card.
The line is secured by the equity in the home, and it can be used on a revolving basis. Interest rates for either type of loan are generally similar to the interest rate on a mortgage. Minimum credit scores and other criteria may apply for those interested in such an option.
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Apply for a Personal Loan
Personal loans can be used for any purpose that the borrower deems necessary. They can be either secured or unsecured, and they may come at interest rates that are lower than hard money lenders may offer.
Personal loans may be the ideal option for those who can’t apply for a new credit card or would rather have a loan with a fixed repayment term.
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Hard Money Lenders May Help
Hard money lenders make short-term loans for those who are looking to make improvements to their properties. While most who take on such loans are looking to flip their homes, it may work for those trying to renovate their new fixer-upper.
Those who are interested in the details of hard money loans or other niche real estate lending options may want to take classes offered by professionals in the industry. This may be ideal for those with poor credit or who don’t want to put assets up as collateral.
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Friends and Family Could Provide Money in a Pinch
Talking to friends and family members may be ideal for those who don’t want to take money from a bank or another stranger. Working with people who you know may allow for the best loan terms.
In some cases, your parents, cousin or best friend won’t make you repay the loan until you sell your home or at all. However, it may be in your best interest to draw up loan paperwork to ensure that no one is out hundreds or thousands of dollars with no hope of seeing it back soon.
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Ask Your Employer for Financial Assistance
Employers may have an employee assistance program that provides loans to help them renovate their homes. This may make it possible to get access to the money that you need without paying a lot of interest.
In some cases, loan payments will be deducted from your paycheck, which means that you don’t have to worry about how you will pay it back on time. If you aren’t interested in a loan, your employer may be willing to give you an advance on your next paycheck or next several paychecks.
If your home needs work, it is important that you take care of it as soon as possible. Doing so may get rid of mold or pest problems as well as providing more space for you and your family to live. By renovating your property, you could get the spacious, efficient and comfortable home that will be one of the nicest in the neighborhood.
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Meghan Belnap is a freelance writer who enjoys spending time with her family. She also enjoys being in the outdoors and exploring new opportunities whenever they arise. Meghan also enjoys researching new topics that help to expand her horizons. You can often find her buried in a good book or out looking for an adventure. You can connect with her on Facebook and Twitter.
