It is not always possible to be stuffed with cash and this is why some renovations never quite take off. However, you can undertake your choicest renovation project even if you are short on cash. Of course, paper currency is the best alternative because it precludes any latter day stress of repayments. If you can’t make it the ‘cash’ way and want to undertake an all-encompassing home improvement for your house, here is what you can do.
Home equity line of credit
You can avail a home equity line of credit. This is granted to those homeowners who have maintained their first mortgage impeccably and have a sizeable home equity. You can draw money and use it without bothering about making the repayments till you are good with making the minimum monthly payments on time.
Home equity loan
Home equity loan works differently from a home equity line of credit in that it is a full-fledged loan which you can take for tenure of 15 years (a duration preferred by the lenders). Cheaper compared to a construction loan, it is your best bet if you have aversion towards adjustable lending rates.
Refinancing
Refinancing the mortgage is still the favourite with Aussies. The present rate is 3.1% on a 30 year mortgage and 3.9% on 15 year tenure. The idea is not to spread the expenses associated with home improvements beyond the time-frame by which renovation lasts.
Reverse mortgage
If you are a senior citizen you may want to get rid of a repayment structure that asks for monthly mortgage payments. This is why reverse mortgage is a hit with the elderly. The size of your loan will depend on your home equity and the best part is that you need not pay the loan back till the time you sell the home or move to a different home.
Contractor finance
You can go for contractor financing for your home improvement project. While it covers the expenses attached with renovation, it is most likely that the cost at which you secure the loan outdoes any other mode of loan procurement. Not something that i would ever advise you to go for!
These are some of the options which you can use if you have been bitten by the renovation bug and are not sure where to pool in the money from.