Five Ways To Finance Your Home Renovation

Dated: August 25 2021

Views: 217

Outdated kitchen. Overrun backyard. Unusable basement space. If you have a home renovation project on the mind, the first thing you have to consider is how you are going to finance it. Here are the most common options to make your dreams become a reality.

1. Cash. Paying in cash is the most straightforward financing option, just save until you have enough money to cover the expenses. This will help eliminate spending outside your budget; however, it can also extend your timeline.

2. Mortgage Refinance. If you’ve been making payments on your home for a few years and your interest rate is higher than current market rates, you may be eligible for a mortgage refinance, reducing your payments and freeing up some money.

3. Cash-Out Refinance. You can tap into your home equity and borrow up to 80 percent of your home’s value to pay off your current mortgage plus take out more cash to cover the renovations. This option is encouraged only when you’re making improvements that will increase the value of your home, as it can add a lot of interest and fees.

4. Home Equity. Getting a home equity line of credit allows you to borrow money against the value of your home. You receive usually up to 80 percent of your home’s value, minus the amount of your loan.

5. Retirement Funds. Homeowners can consider pulling money from a 401K or IRA account, even though they aren’t specifically meant to cover a home renovation. This option might incur additional penalties or tax payments, but may be worth it when making improvements that will benefit them financially in the long run.

BONUS.  If you're purchasing a home that needs lots of renovations, you may qualify for an FHA 203K Renovation Loan which allows you to finance the cost of improvements into your purchase loan.  You have to use a contractor certified in the program to give a quote and to do the work after closing.

Thinking about renovating your home but don't know who to use?  Contact me for a list of vetted contractors in the Charlotte area.  Thinking about purchasing a fixer-upper?  Let's first get you pre-approved with a 203K certied lender like Joe Garner at Certainty Home Loans, then let's find the perfect house for you!

Jimmy Grappone, Realtor at Rinehart Realty
526 N Broome St, Waxhaw, NC 28173
JimmyGrappone.com | TheCLTLifeHomeTeam.com
704-313-8514 | JimmyG@RinehartRealty.com

Thinking about selling your home? Let's get together and put together a plan to get your home listed and sold for the most money in the shortest amount of time.

Jimmy Grappone, Realtor at Rinehart Realty
526 N. Broome St, Waxhaw, NC 28173
JimmyG@RinehartRealty.com
7074-313-8514 

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Jimmy Grappone

I am a Realtor® in the Charlotte, NC market since 2013 and Team Captain for The CLT Life Home Team powered by Rinehart Realty. I am licensed in North Carolina and South Carolina and I have offices i....

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