Friday

Financing a Remodel: Your Funding Options

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Your home is a beautiful reflection of your personality. From the color to window treatments, the property is yours to enjoy over the years. However, remodeling the home is always a good idea as the property ages. Painting the interior, removing a few walls and adding new flooring are necessary but expensive tasks. Take a look at your financial options when you want to remodel your house. Affordability is a common factor that drives all of these selections.



Saving the Old-Fashioned Way

As a homeowner, you know that certain repairs and upgrades are necessary through the years. Ideally, create a savings account that's dedicated to home maintenance. Put a few dollars away every month, which allows the money to grow through its interest alone. Build it up over the years so that there are ample funds to start a few different projects. Although you may need to supplement the projects with other financial options, you still have a strong monetary base to begin the process.

Avoiding the Credit Temptation

You may have a handful of credit cards in your wallet. They all have open credit that's tempting for you to use. Avoid the use of credit cards in these cases. Unless you can pay off the charges within a month's time, they aren't worth the effort. The interest on your charges will add up to a lot more than you can afford. Seek out other options, such as loans, and leave the credit cards for small and everyday items.

Considering a Second Mortgage

A clever way to afford any remodeling project is through a second mortgage. Also known as home equity lines of credit, second mortgages allow you to tap into your property's value. Use a portion of your home's value to fix it up. Pay it back with an interest rate that's close to your primary mortgage's rate. You simply shop around for these types of loans, such as at tribecca.ca/second-mortgages/

Taking Out a Personal Loan

In some rare cases, your home may not have much value right now. Market losses or local issues can certainly ding your value for a temporary amount of time. Turn to personal loans as an alternative to second mortgages if necessary. Your interest rate may not be as competitive as the HELOC, but it's still better than any credit card in the marketplace today.

Don't forget to look at your budget before taking out any loans. Understand what you can afford. By being honest about your financial situation, you can afford certain aspects of your remodel. Fix up the home in small portions so that you're never overwhelmed by any financial burdens.

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