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5 financing options to help with needed renovations
With the right improvements, homeowners may increase the chance of a quick sale at a higher price.
“You’re going to make the property attractive to more buyers and put yourself in a better negotiating position,” says Adam Banninga, a mortgage originator at Independent Bank.
Before you fork out the cash, Banninga recommends talking with a real estate professional. “If you make the wrong improvement, you can spend thousands of dollars on something that brings no value to the market.”
Armed with a sound strategy, homeowners have several financing options available:
Home Improvement Loan. Receive up to $20,000 if you have a credit score of 680 or better. No appraisals or title work are needed.
Home Equity Line of Credit (HELOC). Borrow money against the existing equity in your home, based on a current appraisal.
Cash Out Refinancing. Refinance your first mortgage at a higher loan amount and pull the cash out of the equity you’ve earned in the home.
Special Renovation or Construction Loan. Used for larger renovation projects, such as additions. This type of mortgage loan requires plans and specs during the application process.
Credit Cards or Store Financing. Available from major home improvement retailers, these forms of financing offer flexibility, but often carry higher rates.
Sprucing up your home isn’t limited to sellers. “Sometimes it’s just for personal enjoyment,” says Banninga. Knowing that these improvements will make your home even more appealing when it comes time to sell isn’t such a bad thing either.
