Whether you’re re-doing your home to increase its value or simply to give it a fresh look, there are plenty of home improvement ideas to fit your budget. The key is to make sure you’re getting the best deal.
One way to ensure you get the best deal is to research different types of loans. A home improvement loan can help you finance a wide variety of projects. There are specialized rehab loans, which offer lower interest rates, and HELOCs, which allow you to borrow up to 20% of the value of your home.
The FHA 203(k) mortgage program lets you borrow against the equity in your home. This mortgage avoids double closing costs, and can provide a lower mortgage rate. This type of financing is ideal for people who are purchasing a new home.
In addition, there are options such as a cash-out refinance that let you tap your home’s equity for big-ticket purchases. This may be a good option if you’re planning to renovate your entire house. However, it can be a hassle.
Depending on the project, you can also consider a personal loan. They are typically more accessible than a home equity loan.
Regardless of which type of financing you choose, the best thing to do is to compare rates and terms. Before applying, be sure to check your credit score and debt-to-income ratio. The lender’s recommendation will determine how much you can borrow.
In the event that you need to take out a loan for an emergency home repair, credit cards are generally acceptable. However, they aren’t suitable for long-term financing.