Do you live in the DeKalb County, Illinois area and are thinking about remodeling your home?
That’s great!
But wait…
How are you going to pay for it?
No worries, there are many options available to finance your DeKalb County remodel.
Let’s get started!
1. Home Equity Loan
Home equity loans are great because they usually carry lower interest rates than other loans and can be used as an interest deduction up to $100,000. They allow you to use the equity you have in your house to perform home improvements without having to refinance. This is a bit different from a home equity line of credit.
2. Home Equity Line of Credit
A home equity line of credit (HELOC) is similar to a home equity loan because you are still borrowing against your home’s equity. However, rather than borrowing a lump sum, you will be given a line of credit that is left open for you to use whenever you want, kind of like a credit card. Just keep in mind that HELOCs have variable interest rates, which means your payments could fluctuate.
3. Cash-out Mortgage Refinance
With a cash-out mortgage refinance, you actually apply for a new mortgage to cover all your home renovation costs and possibly other things you need. However, this option is only available to you if you have at least 80% of available equity in your home. And, when you opt for a cash-out refinance, your mortgage starts over again because it’s brand new. That also means your loan’s amortization schedule starts over too. So you will end up paying more interest at the beginning of your loan just like you did with your first mortgage.
Related: What Should be Included in a Remodeling Contract
4. Personal Loan
You could also choose to get a personal loan and use your home as collateral versus going with a home equity loan. However, generally, you have to have good credit to qualify. A personal loan is also a good option if you don’t have much equity in your home.
5. Home Mortgage Refinance Option
If your interest rate is higher than the current market rates, consider opting for a home mortgage refinance. This will lower your current rate, as well as your monthly payments. And this, in turn, will give you the extra money you need to pay for a DeKalb County home remodel.
6. Second Mortgage Refinancing
A second mortgage is a second loan that uses your home as collateral and is a great alternative to getting a personal loan or using your credit card. Getting a second mortgage to perform a home remodel is very common and could, in many cases, increase your home’s value, once the renovations have been completed.
What’s Next?
If you would like more information about performing a home remodel on your DeKalb County home, please Contact Us today. Ken Spears Construction is a well-respected contractor who has been serving the great people of Northern Illinois since 1975. We look forward to working with you too!
