You have the freedom to experiment with your choices when it comes to remodeling your home. But you cannot even hammer a nail if you don’t have adequate money to spend. Whatever the case may be for you, be it moving to a new house or remodeling your old one, there are plenty of ways to gather money or its equivalent to pay for the project. In this article, Matthew Davies Stockton looks at ways to pay for a home remodel.
A few ways to pay for a home remodel are listed below:
- Cash- The best way to complete a home remodeling project is to pay the money via liquid cash. But you should consider this only if you have separate savings for renovation. The most beneficial thing about cash is that you have to depend on nobody and there is no need to worry about EMIs. You need to put yourself on an automated saving schedule in order to save this much money. But once the money is paid, you have no reserve. And most people do not have such a huge amount of money in liquid cash for such kinds of large projects. Be careful about this.
- Grants and Special Programs- This is very useful when you don’t want to lose the chance of getting the service in exchange for free or cheap money. There are several nonprofit organizations and government agencies that do these jobs very well. Check out those agencies before taking out a loan from the bank. The most popular programs are HIP or home improvement program loans, historic preservation, disability assistance, and energy efficiency.
- Zero-percent Credit Card- Getting a loan via credit card is easy to hear but hard to pay for. That is why you should only use a credit card when you have the financial discipline to treat the loan as a regular loan. Plan a neat schedule to pay off the loan before the zero-percent period ends. Remember, once the deadline is over, you may have to pay the whole amount of interest retroactively. Also, the property taxes still must be paid by you including the elevated taxes that come as a result of your home improvement.
- Sweat Equity- Time to get help from your friends and family. They may help you finance your renovation project perfectly. Moreover, the labor is absolutely free, and you are satisfied to have 100% control over your project. But at the same time, you need to remember that while the labor is free, you still have to pay for the materials and if a learning curve is involved it still may be cheaper and faster to hire workers.
- HUD (203k) Refinancing- If you want to remodel your house but do not have enough equity for traditional finance then go for the Department of Housing and Urban Development program that can help you qualify for the refinance and rehab loan. The standard 203(k) covers projects ranging between $5,000 to a near-total reconstruction and the limited 203(k) covers projects having no minimum range but with a maximum range of $35,000.
Apart from these, there are other options to go for too like HUD Title 1 loan, home equity line of credit, or HELOC. Matthew Davies Stockton suggests you plan wisely to know the available options and find out the necessities instead of rushing into your dream project.