Ways of Financing Home Renovations In Southern CA

Some people opt to expand instead of upgrading to a bigger home. The great thing about additions is your option to customize and have it match your personal preferences. Learning about ways of financing home renovations in Southern CA can be useful. The following are some to evaluate.

Unsecured Loans

Unsecured loans are not a perfect alternative but certainly may be a way to fund home renovations. Interest rates are usually higher on unsecured loans than other financing options. Also, interest paid will not have tax benefits. Some people use unsecured loans as interim funding. Once renovations are completed, your home value will appraise for more. This might empower you to then obtain a home equity line or attempt refinancing an existing mortgage. Those funds may be used to pay off unsecured loans.

Home Equity Line

If your property is worth a lot higher than what you currently owe, ask about a home equity line. Most banks will loan up to approximately 80 percent of the current value of your home. A Home equity line offers appealing interest rates and few fees. There are often tax benefits for home equity lines (check with your accountant to be sure). On the down side, the payment period may be shorter and interest rates may fluctuate.

Refinancing An Existing Mortgage

Refinancing an existing mortgage allows you to pull out some equity while retaining just a single loan. It can also be a great way to distribute your home renovation costs over a longer length of time and get a fixed interest rate. The amount of money allowed depends on the particular loan that you obtain and the confirmed value of your property. One down side of this option is the closing costs.

Ways of Financing Home Renovations In Southern CA

Speak with your local loan consultant for information on these options. Also, there may be special home renovation mortgages for which you may qualify. Regardless of which alternative you use, remember that your ongoing recurring home costs will increase as a result. Prior to making a decision, understand what you can afford and what renovation is possible with the budget. The ideas on ways of financing home renovations in Southern CA above are intended merely as a general guideline.