The Best Loan For Your Home Renovation
Whether you are looking to maximize space in your kitchen, add additional rooms to your home, or to remodel your bathroom, our Outer Banks contractors are the top experts in home renovations on the Outer Banks. With all of the loan options available to homeowners that are interested in remodeling, it’s good to know what each type of loan entails and which option is best for your situation. This week, Outer Banks Master Builders would like to discuss the various types of loans available through your lender and what they mean for you.
The Most Common Loan Options For Homeowners:
- Personal Loan: These loans are not tax deductable, but they are a good choice for minor home renovation projects.
- Mortgage Refinancing: You can refinance your existing mortgage using the built up equity in your home, allowing you to gain the extra money needed for remodeling. Keep in mind that this may add additional value to your home, which will also be considered by your lender in determining the amount to be borrowed.
- Home Equity Loan: (HEL) Borrowed against the equity in your home, this type of loan allows you to receive the money that you need in one lump sum and requires monthly payments. If you and your contractor have settled on a predetermined price for the renovations, this is a good option.
- Home Equity Line Of Credit: (HELOC) With this loan, money is available to you on an as needed basis. The process works much like it does with your credit card, but the monthly payments are typically less than those paid on an HEC. You use the money as it is needed and make payments monthly. This way, you can pay for a remodeling project as new or additional costs arise, more supplies are needed, or if changes are made between you and your Outer Banks contractor.
Which Loan Is Better For You?
Describing the advantages of a HEL and a HELOC, Lending Tree experts explain, “The appeal of both of these types of loans is their interest rates, which are almost always lower than those of credit cards or conventional bank loans because they are secured against your home. In addition, the interest you pay on a home equity line or loan is often tax deductible.” In order to determine the loan that is best for you, you must first determine what type of renovations you will need, consider whether the job will be paid for in advance to your contractor or used on an as needed basis, and discuss your loan options and interest rates with your lender.
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Outer Banks Master Builders
4266 Worthington Lane
Kitty Hawk, NC 27949