You love your neighbors, the area you live, how close it is to your work… but the home itself just isn’t working for you anymore.

You’re not alone! Many people grow out of their home, but they love everything else about it. It’s time to readjust your home to fit you again! Depending on your personal financial situation, you should check with a financial planner before pursuing anything.

Please be cautious not to over-improve your home for the neighborhood or spend your renovation dollars on details that won’t provide “return on investment” when you resell.  

I highly recommend getting in touch with a local realtor to discuss what this means for you. Neighborhoods can vary a lot, so getting the insight on the market and neighborhood trends is an important first step while in the research and planning phase of your renovation. Just because you spend the money on “improvements” to your home doesn’t mean you are guaranteed to get it back when you sell. Let’s make sure that doesn’t happen with your renovation, whether it’s a big or a small one.

Here’s some ways to make your dreams come true:

Cash

This option is best when doing so won’t disrupt other financial goals or exceed your monthly budget.

Many homeowners cover renovations with cash, which ensures you’ll finish the project interest-free.

For do-it-yourself and other projects that don’t require full payment upfront, breaking up payments over the course of the renovation helps fit the project into your budget.

Cash-Out Refinance

This replaces your existing mortgage with a larger one. You receive the difference between the current mortgage’s balance and the new, larger loan in cash, which you use to fund your renovation.

This is best when the new mortgage has a lower interest rate than your current home loan and if you need a large loan for renovations to a home you plan to stay in long term.

Home Equity Line of Credit

A home equity line of credit (HELOC) is a credit line you draw from as needed. You pay interest only on the amount you borrow. These can be up to 85% of your home’s value minus what you still owe on your mortgage. Interest rates are usually variable, meaning monthly payments fluctuate as the rate changes. This is best when you don’t know exactly how much the renovation will cost.

Home Equity Loan

A home equity loan is similar to a HELOC, with some differences. This allows you to borrow up to about 85% of your home’s value minus what you currently owe. The difference is you receive the funds in a lump sum and repay over a term that’s often 15 years or less. These loans often have fixed interest rates and monthly payments. These are most helpful when you know the cost of your renovation project.

Remember to choose a financing option that works well for you in both the short and long-term, weigh the pros and cons of all viable options for your situation.  Also, be aware of the time, energy and possible displacement that living through a renovation entails before you move forward and start the process

Having the ability to stay in your current home in the neighborhood you love with an update can be a huge plus for many homeowners.

Email me if you have any questions about any of these options… I’m always here to help!