Finance For Your Home Improvement Projects

By administrator On January 17th, 2009

There are many options available to an individual who wishes to go in for a home improvement project. Home improvement or remodels are exercises that need to be done right so you need to plan for them. No point in doing them half-heartedly; if you have your heart set on a granite countertop in the kitchen or a separate shower in the bathroom then go for it, you have finance options available. Read on.

For small amounts, credit cards are handy. You can use them fast without having to worry about paperwork or appraisal costs.

You can tap into the existing equity value of your home to avail home equity loans and home equity lines of credit (HELOCs).With this loan option, interest payments are tax-deductible. However, home equity loans are seldom offered to DIY home remodelers as such work is difficult to appraise. HELOC loans offer flexibility in terms of money that you can withdraw; this is useful for ongoing home remodel projects where project costs may vary. HELOCs function as revolving lines of credit; you can withdraw exact amounts and repay them to gain tax advantage on the interest amounts. Another advantage of HELOCs is that the interest rates charged are lower than those charged by credit cards.

Check if you can borrow against your retirement funds; the interest rates are low. However you will invite penalties if you leave your job before repaying your loan. You also have a time period of five years to repay your loan.

Your life insurance policies can be used to finance your home improvement and you can obtain cash fast as there are will not be a credit check; but it may affect the benefits your kin will receive in case of your demise before you repay the loan amount.

The federal Housing Administration provides loans for essential improvements to the house such as adding a pathway for wheelchairs, etc.

Another option, a slightly risky one is to avail contractor loans in which the contractor gets paid upfront and you end up with little or no leverage if the work is not satisfactory.

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