When you purchase a home, unless you have designed and built it from scratch, the chances are that will want to make some changes. This can also occur even if you designed it when you find that your family is growing or your tastes have changed.
You might still love the general feeling of your home and even the location, but maybe you need more room or want to change the look and style of its exterior. In states like New York with drastic changes of season, a homeowner might want to upgrade their HVAC system and put a better quality roof on his home. In states like Flordia where the weather is hot all year around, a homeowner might want to add a pool or enclosed sitting area.
Today most homeowners will utilize the equity in their home to secure a home equity loan to renovate their homes. The homeowner in NY will look for lenders who can assist in their state. Florida homeowners will seek a lender who provides home equity loans for Florida homeowners.
Home Renovation is Expensive
Home renovation is an expensive proposition. Renovating even a small bathroom can begin at $5,000 and go up quickly if you want premium fixtures. Kitchens can cost upwards of $30,000 and a room addition depending on the style and size of the job can cost even more. For those that want work done on more than one room or a combination of a room addition and renovating a family room the price will easily double the renovated kitchen cost. With this being the reality a large sum of money will be required and perhaps the best place to find it is in you home’s equity.
A home equity loan can help you get your home looking great and is a a good choice to fund your home renovation project. But you do need a chsklist to ensure it is the smartest decision. Here are some things to consider and do before you take out the loan.
Will You Be Looking to Sell the Home Soon
Many homeowners take out a home loan to renovate without considering how much longer they intend to live in the home. If you are staying for more than say three years after renovation, the renovation will more than likely pay for itself, if you do a smart renovation, keep costs controlled, and the market does not go south during that time. If you intend to sell soom er than this you really need to be sure that you are in a hot housing market in order to get your money out of a sale.
Many realtors will argue that if you put the money into a renovation, you will be able to get a higher market price. This it true but when you consider the cost of the renovation and the interest you pay on the home equity loan for the renovation, you can end up with less money in your pocket than if you had sold the home as is.
Is This the Best Time to Take on a Loan
Think about the renovation project you want to start. Is this the best time to do it. Are things at work stable? Is your marriage happy? Do you have other ig bills coming, like kids going away to school or a new baby? Remember, depending on how mch you borrow, you may be paying off the loan for a decade. Be sure you are in the position to ake these payments because if you default, the bank will look to take your home.
Using a home equitly loan to fund a renovation can be a smart choice. But you need to understand the implications of taking aout a laon and how its impact will affect you.