Typically, homeowners use their home equity loan, credit line, personal loan or refinancing a mortgage to pay for a renovation. Even before you take this step, we will discuss the project in regards to your home value. Why? Experts agree there's such a thing as over-renovating and it can count against you if you plan to sell later. If your renovation puts your home in a new price bracket that doesn’t fit in with their neighborhood, your home will be harder to sell.
We will also discuss with you how to best pay for it. Options include:
- Home equity loan: The classic way to finance home renovations is taking out a loan against the equity in your own house. Large amounts of money may be available for large projects and typically have lower interest rates than personal loans and credit cards.
- Refinance current mortgage: Depending on your current mortgage, it may make sense to refinance your mortgage and build in the renovation funds.
- Personal loan
- Using current liquid assets