For a variety of reasons homeowners may choose to restyle or upgrade some aspects of the home environment. Homeowners looking to carry out home improvements have several choices in terms of how to pay for them including home improvement loans. Deciding on the best options to cover the costs depends on a number of factors. Does the homeowner plan to remain in his home a short or long time? What type of neighbourhood is the home in?
What is the current appraised price of his home and the total amount of money available to spend? Here are some of the best methods to pay for home improvements.
*Life Insurance Borrowing
*Full Home Refinance
*Home Equity Line Of Credit
*Major Credit Cards
*Department Store Credit Cards
Many homeowners don’t think about this borrowing option. But if a homeowner has had his policy for a substantial amount of time, it has built up enough equity which he can pull out in cash. Simply speak to a life insurance agent about the great benefits about borrowing with this method.
Fully refinancing a home costs a little bit more in interest and lender fees than a home equity line of credit but often the homeowner can extract a lot more cash this way. Usually over 90% can be pulled out of the house. That’s enough to cover most home improvement jobs short of creating a castle or palace.
*Equity Line of Credit
A line of credit is a smart, quick way of raising the money for home improvements. The interest rate is not as high as a complete refinance and the payback terms are quite favourable at most lenders, particularly if a homeowner has an excellent credit rating. If the credit score is not so great, clear it up first by paying off consumer debts before applying for an equity line of credit.
Using one or more major credit cards is definitely an intelligent choice to cover home improvements, especially if a homeowner’s credit card rates are low, say under 6% or so. It’s not hard either to simply ask the major credit card company to raise a credit limit when a homeowner has shown an impeccable record of always paying his monthly debts on time or even early.
*Department Store Cards
If a homeowner prepares and shops wisely, he can utilise some of his home improvement store credit cards to purchase bulk building supplies such as wood, flooring, windows, as well as plumbing, electrical and carpentry supplies for both inside and outside of his home. If a contractor purchases them, the homeowner will get charged not only for the supplies but for whatever the contractor decides to charge for the mark-up. So department store cards can really help, but they aren’t perfect.