How To Finance A Home Improvement Project!

This post is provided by Katherine Smith.

If you would like to finance a home improvement project, then you have to be clear on your reasons for doing it. While you may look forward to the end result, you will also have to endure noise and dust as a work crew hammers and drills for weeks on end.

Reasons To Improve Your Home

There are many possible reasons why you might want to embark on a home improvement project.

It is possible that this is your first home, and although the home mortgage terms were highly favorable, working well with your income, budget, and cash flow, the house fell below your expectations. However, with just a few changes that you can clearly envision, it will be just perfect for your needs.

It is possible that you need a home improvement because it is absolutely necessary, or perhaps because a recent hurricane sweeping through your neck of the woods damaged your home.

It is possible that you just want to live in a nicer home, perhaps one with a more spacious and functional kitchen or one with a guest room so that your family and friends do not always have to sleep on the floor when they visit every holiday season.

Regardless of your reason, let us look at some ways to get the money you need to improve your home.

1. Help From Uncle Sam

You may be able to get government assistance- if your home improvement happens to be tied to making your home more eco-friendly. This assistance will not be in the form of a loan but as a tax credit. The Federal government will give you up to $1,500 in tax credits for energy-efficiency upgrades, for instance, if you upgrade your home to use Energy Star appliances. You can get even more credits if you tap into the solar energy incentive program and are interested in installing solar panels and solar water heaters. You may also be able to get additional rebates from state and local government programs.

2. Contractor Financing

You may be able to get financing from a contractor. If you are working with a big contracting service, it is possible that they have a financing division or work with a lending agency and can make a contractor loan. You just have to make sure that you are being charged a fair rate.

3. A Home Equity Line Of Credit

If you have equity in your home, consider getting a home equity line of credit. You can use your home as collateral to borrow a percentage of the equity in your home. The upside is that your interest rates will be much lower than alternative choices because they will be to the prime rate. Moreover, if you have great credit, you can borrow as much as need up to your credit limit. The downside is that it is not easy to qualify. For one thing, you should have put a large down payment; and, for another, you should have lived in your home for a long time. You will also have to pay for your home to be inspected. Additionally, it is not a fast process. It may take almost two months to be approved; although, if you are lucky, it can take just a month.

4. A Personal Loan

Finally, there is the option of getting a personal loan from a company like Credible. This is preferable to putting everything on your credit cards. You will have a lower interest rate. Additionally, it will be a fixed rate, not a variable rate. If you go this route and can get a personal loan, you have to be careful to figure out a realistic repayment plan based on your current budget constraints. While you can get a personal loan from your bank, you may also want to look into alternative lenders. If you have good credit, it is fairly quick and easy to get an online lender to offer a personal loan. Besides getting your money faster, you will probably be able to borrow at a lower rate than a bank loan.

5. Avoid Going Over Budget

Although most homeowners believe that the toughest part of embarking on a home improvement project is getting the money to do it or finding the right people for the job, the biggest challenge is actually staying within budget. Yes, you probably have a plan in place on how much you are willing to spend and a good idea of what you can get for the money, but when you start shopping you are surrounded by many beautiful, high-quality things that would look perfect in your home. Usually, these are only just a little out of your price range and you start to scheme about how you can stretch your budget just a bit.