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How can I Finance my Home Improvement Project?

By
Mortgage and Lending with Financial Center Mortgage

If you still telling your spouse that shag carpet is still cool because you don't know how to finance your home improvement project-I can help!

You can finance your project in three ways:

Home-equity loans (Fixed Rate Lines) are installment loans, like regular mortgages and auto loans. You're given a certain amount of money, which you typically receive all at once and pay back according to a set schedule, over time. Home-equity loans are typically used for larger projects and are preferred for their fixed rate option.

Home-equity lines of credit, by contrast, work more like credit cards. You're given a credit limit that you can borrow against, and paying down your debt frees up more credit that you can potentially spend. Home-equity lines of credit have variable interest rates that are typically tied to the prime rate (a variable rate). Home-equity loans are preferred for smaller projects because you can pay the draw of money off when desired.

Cash-out refinancing, is when you replace your existing mortgage with a larger one and use the extra cash to pay for improvements and repairs. This could be a good choice if:

  • Interest rates have dropped since you got your current mortgage.
  • You'll be in the home long enough to recoup your refinancing costs.
  • Your project adds lasting value to your home.

If you are still unsure of what the best option is for you, please don't hesitate to call!

I look forward to hearing from you,

Spencer Brown

Comments (1)

Nima Rezvan CT Lender CT Senior Mortgage Broker
Nima Rezvan Prosper First Funding Corporation NMLS#110681 - Fairfield, CT
First Time Home Buyer Expert - CT FHA Loans - FHA

Spencer,

Welcome to the community.  You have made a very wise decision to join!

Nima

Jul 06, 2007 03:41 PM