4 options for financing renovations

If you've realized there is a problem in your home after a home inspection, you are probably looking into renovations to fix the problem and improve the overall value of your home. Many large renovations come with an intimidating price tag, but don't let that turn you off from the possibility of remodeling your home. Instead, consider some of these options for financing your plans:

  • Home equity loans. This type of loan or line of credit allows you to use the value of your home as collateral. Of course, you should only take out a home equity loan if you are positive you will be able to repay it on time, as being late or delinquent with payments can put your ownership of the home in jeopardy.
  • Personal loans. If you are unable to get a renovation loan and don't want to tie your home's equity to a loan, you can take out a personal loan from any financial institution to cover costs. However, this is one of the less cost-effective methods of financing due to higher rates and interest.
  • Renovation loans. Loan products like the FHA 203(k) and Fannie Mae HomeStyle loans are targeted specifically at homeowners planning repairs and renovations. Take advantage of your lender's network of affiliated contractors for the best deals.
  • Saving. As the old saying goes, a penny saved is a penny earned, and this is true in the sense that saving up enough money to fund your entire renovation up front will keep you from having to pay more in interest later. However, keep in mind that prices for materials and services may increase as time goes by, keeping you from getting the most bang for your buck.

To schedule a home inspection in the Washington, D.C. area, contact Alban Inspections today.