Many homeowners see the new year as a good time to carry out some DIY or large-scale renovations to their property. However, if you don’t have money set aside for this purpose, financing home improvements can be a struggle. Whether you have recently moved into a house or you are a homeowner who wants to increase the value of your property, here are the best ways to fund your home improvements.
Raise cash quickly
There are so many ways that you can raise money in a quick and straightforward way from home. Think about selling unwanted items on online auction sites. There are also a number of businesses that give you cash for your unwanted CDs, DVDs, books and mobile phones. Also, if you have spare time, you can get money for completing marketing surveys for businesses. One of the advantages for raising money this way is that it doesn’t involve the repayments or interest rates associated with the other funding options. However, as it will take time to raise enough money using these methods, they should be used to fund small renovation projects.
Pay by credit card
Another option for funding your renovations is to use a credit card that offers 0% on purchases within a set period (usually 12 to 18 months). These are best for projects under $15,000 because the lower the amount, the easier it will be to pay off before the 0% interest offer expires. You must read all the terms and conditions before applying for a credit card like this because, after the 0% offer expires the interest rate may increase significantly. Use online comparison sites to find a credit card that offers you the best deal.
Low rate personal loan
Personal loans are the best option if your project will cost between $15,000 and $50,000. The advantage of a personal loan is that your payments are fixed, which means it will be simple to budget. With a personal loan, you will be given a longer payback period than you would with a credit card. Personal loan deals vary widely, so it is worth shopping around for the best terms and lowest interest rates.
Secured loans are available to homeowners and use their property as security. They are a suitable funding choice for anyone planning a big renovation project. However, if you fall behind on repayments for your secured loan, you risk repossession of your home. How much you can borrow, will depend on how much available equity you have in your home.
Some homeowners use their property’s equity to fund home improvements. You can do this by refinancing your mortgage (replacing your current mortgage with a new one). If you have a solid credit rating and sufficient equity, you may wish to consider a cash-out refi that will allow you to access the capital and use it for improving your property. Taking part in this process will also give you the opportunity to shop around for the lowest interest rates.
As you can see, there are many options available for funding your home improvements. Choosing a suitable one will require in-depth research and will depend on the scale of your renovations.