All You Need to Know When it Comes to Financing Your Renovation

Are you in the process of renovating your home? If so, you’re likely wondering how you’re going to finance it. In this credit repair article we will outline some information on different options about which one is best for you. Keep reading this credit repair article to learn more!

With renovating, you can keep your current house and change it to match what you need – without giving up the location that means so much to you. Here are some options you may want to investigate:

Personal loans come in varying categories. While they are most often connected with a new car or vacation, personal loans can also be used for something less grandiose- yet still practical like home renovations if your total spending is beneath $50,000. Unsecured personal loans usually have a lower interest rate than credit cards. Also, personal loans typically last for only three to five years whereas home loans can last 20 to 30 years.

So, with personal loans you end up paying less in interest overall. Additionally, the interest rates on personal loans are often fixed for the entire length of the loan. If you’re comfortable with a little bit of change and aren’t interested in breaking the bank, consider using a low-interest credit card to finance your renovation.

This is especially convenient if you plan on buying materials through an online or phone retailer. However, as with any other credit card purchases, it’s important to manage expenses carefully and strive to pay off the debt quickly to minimize interest costs.

If you have surplus money after paying your mortgage and if your mortgage plan permits, then you can access this money for home renovations. However, be mindful that redrawing from extra repayments means losing the benefit of reduced interest charges on your mortgage because it will increase the principal amount owed. Keep in mind that your lender may charge fees for refinancing and increasing your mortgage.

Also, a bigger mortgage usually comes with increased loan repayments and/or longer repayment terms.

Be mindful that you might need to pay fees from your mortgage before refinancing, on top of the new application fee. What makes sense for you depends on various factors, so be sure to assess all pros and cons thoroughly before making a decision.

If you’re struggling with a poor credit history, Clear Credit Solutions can help. We offer a free credit file assessment to determine the best course of action for repairing your credit history. Contact us today to learn more about our credit repair and how we can help get your credit back on track.