As the saying goes: ”your home is what you make it”. So if your property has been neglected over the years, you’ll most likely be facing a bunch of expensive repairs and renovations.
But if you just don’t have the cash to splash, is it possible to make those much-needed home repairs before the situation gets worse?
Well, this is where an alternative source of funding comes into play if your bank account just doesn’t allow for it.
Here are a few options…
5 Sources of Funding For Much-Needed Home Repairs
Whether you’re looking to make small little fixes or an absolutely massive overhaul, adequate funding is an integral part of any home renovation project.
So if your cash flow is running low but your home is in major need of a little TLC, here are 5 funding options to consider:
1. A Home Equity Loan
Most people may recognize this option as taking out a second mortgage. This type of loan is ideal for large-scale home renovation projects such as re-roofing, foundation repair, and the addition of square footage.
A home equity loan is a great option as its paid out as a lump sum of money that is readily available to you. You then have the option of how many years you’d like to repay the loan with fixed monthly payments.
Check out this useful tool to get an idea of what your average monthly repayment could be.
2. Home Equity Line of Credit
Also known as HELOC, this form of financing offers a consistent, ongoing stream of money that you’re able to access whenever you need it.
Sounds great, but what’s the catch? A home equity line of credit works similar to a credit card and requires monthly repayments. It also has a limited draw period, which is usually up to a maximum of 10 years.
If you haven’t been able to pay off this revolving line of credit over this period, the balance of what is owed is converted into a fixed home loan.
3. Mortgage Refinance
In short, refinancing your mortgage gives you a whole new mortgage, essentially replacing what you currently owe on your home. However, this includes a new interest rate, too.
The great thing about refinancing your mortgage is that you get to cash in on the difference between the two mortgage loans. I.e. if your new loan is greater than your previous one, those extra dollars from the refinancing are yours for the taking.
This way you’ll have extra financing to make all the renovations you need.
4. A Personal Loan
Taking out a personal loan may sound a little excessive for a home improvement project. But today, personal loans are highly accessible and monthly repayments are affordable.
A personal loan is ideal for a mid-sized home renovation project, such as a bathroom makeover, exterior repainting, etc. You can use this loan to DIY the project yourself or hire a professional contractor to do the job for you.
5. Government Loans
Government loans are not only accessible, but some of them save you money by cutting out insurance and interest payments.
There are generally two types of government loans ideal for home renovation financing. The first is an FHA Title 1 loan. You can borrow up to $25,000 without having to own equity in your home.
However, you have to prove that this money will go towards improving the quality and livability of your home.
The second is a VA Cash-Out Refinance loan. Basically, the loan amount granted is guaranteed to be 100% of the value of your home. However, you will have to pay insurance and interest on this loan.
If you cannot meet repayments, the insurance provided to your lender is the loan guarantee.
Find In-Home Inspiration For Your Renovation
Extensive home repairs can be long and tedious projects, so if you’re looking for a little pick-me-up, check out the rest of our website for design inspiration.
We offer knock-off decor from some of America’s most loved home decor suppliers, such as Pottery Barn, West Elm, Ballard Designs, and more.