After you've lived in your home for a few years, you might decide it's time for some home improvements. Maybe your home was second hand and it's about time you fixed it up for health and safety issues. Or maybe your home just needs to be modernised. But the problem is money. Should you take out another loan? This will mean that you will be servicing two loans at the same time. Another option is for you to refinance?
Refinancing is one way to raise money for whatever home improvements you plan. However before you finalise your decision there are a few things to consider first:
1. Get estimates. It's difficult to know exactly how much money you will need for your home improvements without getting estimates first. Some improvements like restructuring, wiring and putting in energy efficient storm windows will cost a pretty penny. Go and get estimates on what needs to be done and how much it will cost. Then choose the most reasonable estimate. Once you've added up all the costs you will know exactly what you need and then you will know if refinancing is a good option for you or not.
2. The size of the job. Home improvements costs vary greatly, it could be $10,000 or $20,000. If you home has appreciated significantly from rising property prices then the cash payout from refinancing might cover the costs, leaving you only one repayment per year. If your home improvements is a really large job that require more cash than the refinancing could give you, then you could consider a second mortgage if you have the equity to back it up.
3. Future plans. What are your plans concerning your current home. Will you stay there for long? These plans will affect what kind of home improvements you should do. Home improvements should be done to raise the value of your home. If you don't plan to live there for long, then putting in hardwood floors or butcher block countertops are good, but repainting may not be good. The reason is that when you sell your home, the new owners might not agree with your choice of colours, so why waste all that money on repainting. And why spend all that money in a second mortgage if you're not planning to live there.
4. Can you pay by instalments? Many renovation companies offer financing for home improvements, you make a lump sum payment first and then pay the rest over time. If your credit rating is good, you can have a low interest rate. You might even get one that is interest free for a period of time. This can be a better option than refinancing.
Refinancing can be one way to pay for home improvements, but that many things to consider before approaching lenders. There might be other options out there for you.
If you found this article useful, you can get more great mortgage advice tips and tons of free investment advice at Invest Money Stocks.
This article was written by Richard Tyler - a happily retired investment guru who ran several successful businesses during his earlier years. He now shares his wealth of knowledge on investment, business and strategic wealth management at Invest Money Stocks. Ignorance is often the reason why some people are unable to harness upon what they already have to make more money while some 'in-the-know' get richer every year simply through investments. Richard sees it as a passion as well as a pleasure to share his knowledge and experience and hopes that his website will be a wealth of knowledge for those who need help in investment and wealth management matters. Invest Money Stocks covers a wide range of topics from business management, home budgeting, personal wealth management to stocks investment, options trading, penny stocks trading, forex trading, bonds, technical analysis, fundamental analysis and more.
Refinancing is one way to raise money for whatever home improvements you plan. However before you finalise your decision there are a few things to consider first:
1. Get estimates. It's difficult to know exactly how much money you will need for your home improvements without getting estimates first. Some improvements like restructuring, wiring and putting in energy efficient storm windows will cost a pretty penny. Go and get estimates on what needs to be done and how much it will cost. Then choose the most reasonable estimate. Once you've added up all the costs you will know exactly what you need and then you will know if refinancing is a good option for you or not.
2. The size of the job. Home improvements costs vary greatly, it could be $10,000 or $20,000. If you home has appreciated significantly from rising property prices then the cash payout from refinancing might cover the costs, leaving you only one repayment per year. If your home improvements is a really large job that require more cash than the refinancing could give you, then you could consider a second mortgage if you have the equity to back it up.
3. Future plans. What are your plans concerning your current home. Will you stay there for long? These plans will affect what kind of home improvements you should do. Home improvements should be done to raise the value of your home. If you don't plan to live there for long, then putting in hardwood floors or butcher block countertops are good, but repainting may not be good. The reason is that when you sell your home, the new owners might not agree with your choice of colours, so why waste all that money on repainting. And why spend all that money in a second mortgage if you're not planning to live there.
4. Can you pay by instalments? Many renovation companies offer financing for home improvements, you make a lump sum payment first and then pay the rest over time. If your credit rating is good, you can have a low interest rate. You might even get one that is interest free for a period of time. This can be a better option than refinancing.
Refinancing can be one way to pay for home improvements, but that many things to consider before approaching lenders. There might be other options out there for you.
If you found this article useful, you can get more great mortgage advice tips and tons of free investment advice at Invest Money Stocks.
This article was written by Richard Tyler - a happily retired investment guru who ran several successful businesses during his earlier years. He now shares his wealth of knowledge on investment, business and strategic wealth management at Invest Money Stocks. Ignorance is often the reason why some people are unable to harness upon what they already have to make more money while some 'in-the-know' get richer every year simply through investments. Richard sees it as a passion as well as a pleasure to share his knowledge and experience and hopes that his website will be a wealth of knowledge for those who need help in investment and wealth management matters. Invest Money Stocks covers a wide range of topics from business management, home budgeting, personal wealth management to stocks investment, options trading, penny stocks trading, forex trading, bonds, technical analysis, fundamental analysis and more.
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