There's no way to get around this simple truth: Home renovations of any reasonable scope – in other words, beyond a simple new window installation or repainting a small area of the household – are going to require a considerable investment. Chances are fairly high that if you find yourself paying less money than you expected for home improvements, you'll probably end up with cut-rate work that severely damages your house's overall aesthetic.
Quality home renovations aren't cheap, but shouldn't cost an arm and a leg either."
All that being said, though, many of us living in the Sunshine State aren't richer than Croesus, or anywhere near the wealth of those outside the realm of myth who can throw disposable income around on household beautification tasks. The majority of Florida homeowners simply want to strike a balance between paying for quality and not breaking the bank. If there are some renovations you've been aching to do for years or, more seriously, must do for the good of the property, you can seek out financing to cover the necessary expenses with reasonable terms of repayment. Let's examine some of the best ways to do exactly that:
Using mortgage or home-equity funds
According to Bankrate, those who own their houses per the terms of a fixed-rate mortgage should be in respectable position to finance the costs of renovation, because they have several different ways to renegotiate the stipulations of that mortgage.
Cash-out refinancing is among the most common of these methods of renegotiation. In most instances, it eradicates existing financing obligations to create new terms, and in the case of a fixed-rate mortgage, allows you to ensure favorable interest in this time of historically low rates for the new loan's duration. Also, Bankrate explained that this process should free up some funds for you to put toward whatever repairs you want or need. If you're prepared for higher closing costs and greater interest on any home equity line of credit you possess, cash-out refinancing can work out well.
Speaking of equity, you can also put money from the credit line connected to your home toward renovations. For example, if you need $60,000 to complete these tasks, Bankrate stated that your home equity line of credit should be worth $235,000 or more. This isn't an exact formula, however – all lenders are different. If your line isn't that high, you can negotiate with your bank or credit union to raise it regardless of your home's value, as long as you're in good standing with your loan payments.
Personal loan pros and cons
If you don't have cash on hand to afford renovations but your overall credit is good or better, consider requesting an unsecured personal loan from your financial institution. However, as NerdWallet pointed out, this option has the highest interest rate of all the choices discussed here, and you can't deduct its payments the way you can with mortgage installments. Personal loans are best for those with reasonable financial standing who need funds quickly and don't have time to go through the refinancing processes.
Alternative options: Credit unions and online financing
Because credit unions are regulated by the federal government even more than banks bound by rules of the Federal Deposit Insurance Corporation, they can't stick you with usuriously high interest rates – the maximum is 18 percent, according to NerdWallet. These institutions also aren't gun-shy in terms of dealing with credit, so if you're in solid financial standing but have a past loan obligation that drags down your score, they won't refuse to offer you financing.
Finally, there's online lending to consider. These financiers grew in popularity during the past several years, particularly among small-business owners, in no small part due to public dubiousness regarding mainstream financial institutions in the wake of 2008's financial crisis. However, according to the Biz2Credit Small Business Lending Index, they're growing less favorable as the banks regain their footing. Online lenders are helpful if you need capital fast, but NerdWallet states that they can be picky about who they lend to, and they aren't FDIC-regulated.
To learn more about installing new residential windows and other home improvement tasks, contact NewSouth Window Solutions today.