A lot of homeowners had the desire the beautify their home through various home improvement projects. However, doing so requires a large amount of money, especially if one is not only aiming to make his or her home appealing to the eyes but also to increase the value of their home as well. But thankfully, there are lots of ways to finance home improvement projects, and in this article, we are going to discuss them one by one.
Paying cash is the easiest way to finance your home improvement project. However, saving up enough money is easier said than done. It would eat up a significant amount of time and takes a lot of patience to do this. But if you want to do your home improvement project without risking yourself to being in debt, then this is the best choice for you.
You can also use your credit card to fund your home improvement project. However, this financing option usually comes with a high-interest rate. There is also a risk of losing a lot of money due to penalty charges whenever you missed your monthly dues or late payment. But if have proper discipline is using your credit cards and can pay your dues on time; then it can be beneficial to you since most credit card lenders give their borrowers with reward points and incentives.
Home Equity Loan (HEL)
If your house has built enough equity value over the years, then you can apply for a home equity loan using texas cash out refinance. Also known as the second mortgage, it is a type of mortgage loan where you will put your home as a collateral to get a large sum of money up to 80 percent of your home equity value. It also comes with a flexible repayment term since you can pay the amount loaned up to 30 years.
However, you must always keep in mind that you are putting your house at risk from getting foreclosed if you fail to pay the loan, so make sure that you will only get the amount of money that you need for your home renovation project.
Home Equity Line of Credit (HELOC)
Similar to HEL, Home Equity Line of Credit can also be loaned from texas cash out refinance. But unlike HEL, where the lender will give you the total loaned amount, HELOC, on the other hand, deposit the full loaned amount to your bank account where you can withdraw anytime. However, HELOC monthly payments are higher than HEL since the repayment term for this type of loan only last for 15 years.
This type of loan is a perfect alternative if you don’t want to risk your home as collateral. However, repayment term for this type of loan only ranges from 5 to 7 years and usually comes with a higher interest rate. It benefits homeowners whose house don’t have enough home equity value to qualify for a HEL or HELOC loan.