4 Ways To Finance That Renovation

4 Ways To Finance That Renovation

So you have finally purchased that 19th century farm house that you have always pictured yourself living in​ the problem is​ how do you finance the restoration? it​ is​ easy to​ get mortgages for the value of​ the home even a​ little extra if​ you have a​ good credit rating but today a​ renovation can cost more than the original purchase price of​ the property.

The first option s to​ look at​ your available assets. You can get a​ home equity loan if​ there is​ any equity in​ your house. Use your credit cards for short term renovation or​ borrow money from your parents these ideas are only usable in​ a​ short term renovation once the renovations completed you should be able to​ refinance your home and pay of​ the relatives, high interest credit cards and roll your home equity loan into your mortgage.

You may be able to​ get a​ “line of​ credit” a​ line of​ credit is​ usually easy to​ get up to​ $30,000.00 with out much effort and with a​ minimal amount of​ paperwork these lines of​ credit are good for short term renovation that are under the $100,000.00 dollar mark. The interest rates tend to​ be on the high side but you can draw out the money as​ you need it​ and only pay interest on the cash that has been withdrawn and again once the renovation is​ completed you can refinance and pay of​ the line of​ credit and combine all your loans in​ the mortgage.

Depending on the scope of​ your renovation you may be eligible for store loans and credit card offers. Many home stores now have their own credit cards they offer deal such as​ interest free credit for one year you may be able negotiate a​ longer term. The important thing here is​ to​ pay off the loan/credit card prior to​ the free period expiring otherwise the interest will revert back to​ the initial purchase. Some stores will also offer you a​ interest free construction loan for your project the terms of​ these construction loans vary from store to​ store read the fine print carefully like the credit card deals these usually have a​ time limit. Again one the renovation is​ completed you can refinance and pay off the loan avoiding high interest dept.

Construction loans are generally reserved for larger projects this kind of​ loan is​ a​ short term loan the money can be taken as​ needed and interest is​ paid on the money that has been taken out. Almost everyone now offers construction loans this completion has brought the costs of​ these loans down. The nice thing about construction loans is​ that you can withdraw the money as​ you need it​ once the renovation is​ done you can refinance and have one closing and one mortgage. One thing you should keep in​ mind when shopping for a​ construction loan is​ the fees and finance charges as​ always keep an​ eye on the fine print for hidden charges.

4 Ways To Finance That Renovation

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