Have you decided to sell your home, but first need to make some pretty serious repairs to the property before putting it on the market? Or have you purchased a “fixer-upper” that you plan to turn into your own domestic paradise with some much-needed TLC? Either way, you need to get things around the house fixed up – and you need to be able to pay for it. Financing home repairs doesn’t have to be a nightmare. In fact, there are a lot of ways to get the funds together!
Put Your Home’s Equity to Use
If you’ve been paying toward your mortgage for some time, you have likely accrued some pretty substantial equity. “Equity” refers to how much you “actually” own your home (how much you have actually paid for toward your principal). This equity can be borrowed against the value of your home in either a lump sum or a home equity line of credit (HELOC).
A HELOC arrangement allows you to withdraw money as you need it, which is great if you have numerous smaller projects that need to be done. A single lump sum payment from your home’s equity is a great option if a single large, expensive project needs to be completed.
If you’re looking for a smaller amount, a second mortgage may also be a great option. Toronto second mortgages can help you decide which option is better for your unique circumstances.
Refinance your Mortgage
Many homeowners refinance their mortgages to access money that is essential for making major or minor home repairs. Refinancing essentially allows you to enter into a different mortgage with a larger amount while you get to pocket the difference. This difference can then be used to pay for the renovations that your home needs.
Obtain a Personal Loan
Personal loans often have a smaller rate of interest and are intended to be paid off within one to five years. If you are in a financial situation where you can handle the payments on your mortgage, utilities and other financial aspects of your life, a personal loan toward home improvements can be exactly what you’re looking for.
Pay for it Yourself
To avoid the complications that come with loans, home equity and other means of financing home repairs, many homeowners will dip straight into their savings. This is an ideal solution for those who expect to sell the house for an amount that compensates the cost of repairs, as well as those who want to turn the home they own into a home where they will stay for the rest of their lives. In this case, it is worth the personal investment made.
Paying for home improvement projects of any size can be difficult, and on paper might even seem intimidating. This doesn’t have to be the case if you can utilize any of the above methods of financing home repairs.