Remodeling Costs: 3 Smart Solutions To Help Save You Time And Money

Remodeling costs are as hard to predict as they are to afford. That’s why it may be a good idea to consult with experienced home loan professionals before you undertake a remodeling project. They can offer solutions to help save you time — and money. Before you decide how to finance remodeling costs…

Here are 3 solutions to ask for by name:

A cash-out refinance

• These are first mortgages that also allow you to borrow a lump sum from your home’s available equity. A refinance may let you improve the terms of your first mortgage while you get cash to pay remodeling costs — potentially killing two birds with one loan!

• Typically, interest rate will tend to be less than nearly every other type of credit, and is usually tax deductible. (Check with your tax advisor for details.)

A home equity loan

• Also called second mortgages, these allow you to borrow a fixed sum from your home’s available equity, while leaving your first mortgage in place if you like it as it is.

• The interest rate and payment are typically fixed, lower than most other loan options, and tax deductible. (Check with your tax advisor for details.)

A home equity line of credit (HELOC)

• A type of second mortgage, HELOCs allow you to borrow against a line of credit, much like a credit card, while leaving your first mortgage intact.

• Because the money you borrow can be repaid and re-used during the draw period, HELOCs can be a convenient way to pay for remodeling costs.

• The interest rate and payments fluctuate, but are generally lower than most other loan options, and the interest expense is usually tax deductible. (Check with your tax advisor for details.)