Whether you are looking to buy a new home to remodel, or renovate an existing home, here are two important questions to consider:
- Can the location support the new value?
- How will you pay for it?
As real estate agents we help our clients navigate this process and make knowledgeable decisions based on location and market trends. The best place to start is to explore different financing options associated with remodeling a home. Here are three of the most common:
Home Equity Line of Credit – A Home Equity Line of Credit (HELOC) allows you to borrow funds against the equity in your home. A HELOC allows you to draw funds as you need them, up to your credit limit and are typically set at an adjustable rate. Many plans have a fixed time period. Interest paid may be tax deductible
Home Equity Loan – Like a HELOC, a Home Equity Loan (HEQ) is based on your home’s equity. You will receive the entire loan amount at closing. HEQ’s are generally a fixed-interest loan with terms up to 15 years. Interest paid may also be tax deductible.
Refinancing Your Existing Mortgage – For many, refinancing is still a great option, and with today’s historically low interest rates, it’s an even better way to finance a remodeling project. For those who haven’t built up a lot of equity, yet, many lenders offer future value loan programs which set a loan amount based on the future value of the home after remodeling.