Mortgage Refinancing for Home Improvements
January 9, 2017
Home improvements are a satisfying endeavor, but what if you don’t have the cash in your pocket to tackle that long-overdue project?
Golden Oak Lending has a solution. You can refinance your home loan and take cash out of your home equity. If you’ve been paying your mortgage installments, you should be in a good position to take advantage of this… and get that new kitchen of your dreams!
What are the benefits of Refinancing My Home?
- Get money now to pay for expensive home improvement projects
- Improve your home and increase your home’s resale value at the same time
- Pay off your old mortgage and have money left over
- Enjoy a potentially lower interest rate than you currently have
Here are some ways you can use mortgage refinancing to pay for home improvements:
- Refinance your mortgage. In many cases, you will benefit from refinancing anyway, and when in need of home improvement money, this option may be the way to go. You can even avoid paying up to 2 months of payments on your mortgage when doing a refinance.
- Cash-out refinancing. When you get a cash-out refinance, you essentially replace your current loan with a larger loan and keep the difference in cash, which can be used to pay for home improvements. Pick a project that increases your home’s value—such as updating your kitchen or bathroom.
The most sure-fire way to cover your expenses is to wait until you can pay cash. Maybe this means you don’t get to do the entire project at once. Maybe you start by doing one small job at a time. It will take a healthy dose of patience, but you need to be able to sleep at night.
- Home equity loan. Here you borrow a fixed amount and pay a fixed payment over time. You can work with your lender on the timeframe—anywhere from five years to as long as thirty.
What are The Risks Involved in Home Refinance?
- You’ll pay more interest in total and over a longer period of time
- Your investment is diminished as equity is extracted from your home
- You’re at risk if property values falter