Although you can certainly use savings or short-term credit, there may be other ways to fund your kitchen remodel, addition, or master suite.
Cash-out refinancing – If your interest rate is higher than the current rate, consider refinancing. With an appraisal of your home’s existing value, you have the option to cash out your equity and enjoy the benefits of a lower interest rate.
Construction loans – If you plan to add significant square footage or make major changes to your home, a construction loan could be the solution. This loan takes into account your home’s After Repair Value (ARV), determined by a home appraisal based on your project’s construction drawings. The loan is then applied to your current mortgage.
Home equity loans – If refinancing isn’t an option, a home equity loan is comparable to a second mortgage. You can use your home’s current equity to make improvements, and you receive the entire borrowed sum upfront.
Home equity lines of credit – Similar to a home equity loan, a line of credit is based on your equity; but you only take out funds as needed – something to consider if you’re unsure about the amount of improvements you’ll be doing.
Contractor financing – Only borrow money through a reputable, stable contractor offering financing through an established bank. This kind of funding is most beneficial to homeowners who can pay off their project in a shorter period of time. For example, Renewal offers 12 months same-as-cash financing through EnerBank USA.
*Remember: Renewal Design-Build is not a lender, nor are we financial advisors. Always check with your own financial advisor and loan officer for the best possible financing solutions for you.