Reading Time: 3 minutes – Posted: September 2020
With so much talk around home buying and refinance rates driving the housing market this summer and fall, many want to capitalize on the low rates. Homeowners are choosing to make improvements to their existing houses to accommodate remote working and schooling, or other comforts to gain more living space.
There are great options for homeowners with projects of any size, from a small kitchen facelift to finishing basements or attics to make them livable areas. Other homeowners who have equity in their homes but don’t need to renovate may choose to consolidate debt or make a large purchase.
Are you looking to renovate your home? Happy with your home but interested in a boat, RV or debt consolidation?
Here are some financing options to consider.
Home Equity Loan
Looking for predictable, fixed payments and the flexibility to use your home’s equity in a variety of ways? If you answered yes, then a home equity loan is a great option for you.
With a home equity loan, you get set payment terms and can use the funds for home projects or other needs, such as paying for a child’s college tuition.
Home Equity Line of Credit (HELOC)
If you want to use equity for a revolving credit line, like a credit card, that you can dip into when needed over a longer period, consider taking out a HELOC. With this type of variable interest credit line, you have access to funds for up to 10 years (the draw period) with as many as 20 years to pay the loan back (the repayment period) in full.
Home Improvement Loan
If you have a renovation or addition but not much equity, a home improvement loan may be a fit for your needs. With fixed rates and terms, you can know exactly how much you will pay for the project and for how long.
The funds must be used for a home improvement project and you’ll need the estimates and invoices to submit to your bank.
A personal loan is a great option for newer homeowners who have not built up enough equity but want to expand or renovate their home, while also having the flexibility to use some or all of the funds for things like debt consolidation or a wedding. Personal loans have fixed rates and terms with low minimum loan amounts, but the rates are typically higher than a home improvement loan.
A personal loan is also a good option for renters who need cash to set up a home office or remote learning space, or to consolidate debt as they save for a home purchase.
Whatever your home renovation or improvement project may entail, financing options are readily available with flexible options for additional short and long-term uses.
About the Author – Jim Wechsler
Jim Wechsler is Senior Vice President, Chief Retail Lending Officer at WSFS Bank, responsible for Consumer Lending, Small Business, Government Guaranteed Lending, Community Reinvestment and NewLane Finance.