There’s no place like home. But how much better would it be with that addition, or with a new kitchen? More and more homeowners are deciding that the best way to improve their lifestyles and their personal balance sheets is to invest in their single biggest asset: their home. Home remodeling and improvements are an investment that can increase property values and improve the lives we live within our own homes.
Once you have created a vision for your home, you’re going to need some money to get the job done. Obtaining financing starts with qualifying for a loan, and your best bet is to talk to a Quest loan officer about all of the financing options available. Besides helping you understand the types of loans available and the various trade-offs involved, the Credit Union can pre-qualify you which puts you in a better situation when planning your budget or shopping for materials.
Home Improvement Financing Options
Home Equity Loans. Home equity loans and home equity lines of credit (HELOCs) allow you to tap into the equity you’ve already established in your house in order to finance your home improvements. This way, you can use the equity you’ve established without actually selling your home. As an added bonus, interest payments are usually tax-deductible. One of the keys to home improvement financing is trying to minimize the pain of this interest.
Home Equity Lines of Credit. A home equity loan is generally the best way to go if you’re doing a one-time project. If the project is ongoing, however, a HELOC is a more flexible way to go. If additional costs arise, you can withdraw more funds (maximums apply), without the hassle of having to reapply. At the same time, they retain the tax deductibility advantage of home equity loans, and the interest rate is usually much lower than that of credit cards.
Credit Cards. The go-to for your clothes shopping may be the best answer for home improvement financing as well. If the cost is under a thousand dollars, a credit card is cost-effective and hassle-free.
Before You Borrow Money
There’s no substitute for doing your homework. In addition to researching financing with a Quest loan officer, read up on what remodels best increase property values in your area. It is also a good idea to finance upgrades that will cut your monthly bills. For example, installing a new furnace and getting new windows might reduce heating bills enough to offset a large portion of the costs.
Tips of the Trade
Make sure you talk to Quest about your options and how they relate to your income, debts, credit history and property value.
Consider a secured loan when you want to borrow more money, get a lower interest rate, or reduce taxes.
Refinance an existing loan if you have enough equity and if the rates are lower now than when you initially borrowed the money.
Use a home equity line of credit that is secured by your home so that your interest is tax deductible.
Take out a home equity loan to get fixed rates and payments. Consider a homeowner loan that is secured by your property.
Make your money work for you by prioritizing improvements that positively impact the market value of your home.
Get Started Today!
*Annual Percentage Rate (APR), terms and conditions dependent on credit qualifications and approval, and subject to change without notice. **HELOC terms: 60 month draw. Monthly APR is fully indexed, variable rate based on Prime Rate (obtained from Wall Street Journal) plus or minus a margin based on loan-to-value ratio. Maximum APR that can apply: 18.00%. Minimum line of credit amount: $10,000. Minimum advance: $100. If appraisal required, additional charges may apply. May be subject to closing costs including origination fee, and may vary. +Interest on the portion of credit extension that is greater than fair market value of dwelling is not deductible for Federal income tax purposes. Consult a tax advisor for information regarding deductibility of interest and charges. Adequate property and flood insurance may be required. Credit union membership required. Other restrictions may apply. Visit www.Quest-CU.org for additional rate information.