If you plan on borrowing money to fund your home renovations, there are a number of loans out there to help with just that.
Refinancing. Depending on your current interest rate, you might be able to refinance your mortgage at a lower rate and/or for a longer loan term, which could lower your monthly payments and help you save up for your renovations.
Cash-out refinance. If you have enough equity, you could also consider a cash-out refinance, which means refinancing your existing loan for an amount that's higher than what you owe. Going this route, you pay off your original mortgage and have cash left over. Use a refinance calculator to see if refinancing makes sense to you.
HELOC. If refinancing sounds like too big of a leap, a home equity line of credit (HELOC) might work better. A HELOC work a lot like a credit card in the sense that it has a set limit that you can borrow against.
Home equity loan. Although it sounds similar to a HELOC, a home equity loan is a bit different. This loan requires you to take out all the cash at one time. They're often referred to as "second mortgages" because homeowners get them in addition to their first mortgage.
Refinancing, getting a HELOC or taking out a home equity loan are all big decisions, and it can be tough to know which one makes the most sense for you. As with any new loan, consult with a lender to see which option is best for your situation. Let us know how we can help!
