Are you considering home renovations? Dreaming up the improvements you’ll make to your home is exciting, but it can also be stressful to weight the best option to finance your renovations. To give you a head start, we’ve compiled the most common ways of financing home improvements.
Depending on the terms and conditions of your mortgage, you may be able to refinance your mortgage and acquire additional funds to finance your home renovations, consolidate debt, use for an investment, and more. This option allows you to borrow up to 80% of the value of your home. It’s best to compare this option against all financing options to see the full cost/benefit of refinancing your mortgage based on your current and future needs.
Depending on how much equity you have acquired on your current home you could be eligible for a home equity line of credit, also known as a mortgage secured line of credit. For credit union mortgages, this lending option can secure up to 80% of the value of your home, whereas other financial institutions may only be able to offer up to 65%. A home equity line of credit is a great option for those who are disciplined with their finances since it uses the equity you’ve acquired as security against the credit amount borrowed. It offers the benefit of knowing you have funds available if and when you need them throughout your home renovation.
If refinancing is not the best option to finance your home renovations, a personal loan may be a great alternative. A personal loan offers you the security of a fixed term and payment schedule and offers the funds required to complete your planned home renovations or home improvements.
A personal line of credit may also be an alternative. This option offers you the same ability of having access to the funds you require for your home renovations when you need them, as well the flexibility to determine and manage the payment schedule to repay the credit amount used.
It’s great to know what financing options are out there, but you’re likely wondering which is best for you and your project. Your Credit Union mortgage specialist can be an invaluable resource in helping you land on the right option. Contact your Credit Union to set up a chat.