Refinancing For Your Home Remodeling Project
There’s no question that home remodeling is an investment. From bathroom or kitchen remodels to new home additions, it’s often a worthwhile cost, but a cost nonetheless. Some homeowners find themselves looking for ways to save money or to free up more funds so that they can spend more on their home remodeling project. One way to do this is through refinancing. Is this the right call for your home remodeling project? Let’s break that down in today’s blog:
What Is Refinancing?
Refinancing involves adjusting an existing credit agreement or changing it entirely. When it comes to home remodeling projects, typically refinancing refers to refinancing your mortgage. This often means paying off the current mortgage lender and then starting fresh with a new mortgage lender. The goal is to find a lending agreement with lower interest rates or a more appealing payment term. You might be able to work with your current lender to refinance your current mortgage loan, so make sure to check there first.
Types of Refinancing Options
You might also be able to get a “cash-out refinance,” in which you borrow more than the cost of your original mortgage and receive the difference between the two numbers in cash. You can use this cash to cover the cost of the remodeling project. Another refinancing option is a renovation loan. This might be the best option if you have particularly low equity. With a refinancing loan, you add the cost of the renovation into a new mortgage agreement, as well as wrapping closing costs. This kind of refinancing loan is specifically designed for homeowners who need help to afford their renovation.
If you don’t like the idea of a cash-out refinance or a remodeling refinance, but you still need a little help in order to make the remodeling project more affordable, look into the remodeling company’s financing plans. Remodeling companies often work with lenders to offer financing plans such as taking time off interest payments or lowering interest payments for the first year. With monthly payments, financing can help homeowners work their remodeling project into their budget much more easily.
So you know how you’ll finance your remodeling project. Now the next question is who to work with? MBC Remodeling has been providing high quality remodeling projects since 1999. We can help with your remodel, too. Contact us today for more information or to set up a free consultation.