When you first bought your house, everything felt new and there was a sense of excitement about your home. As time goes on, however, you may discover that your current home no longer fits your lifestyle or fulfills your current needs (more space for your growing family, different amenities, etc.)
Rekindling that magic, or creating something even better, can be achieved by upgrades and home improvements that you can fund with an affordable renovation loan.
How Can I Use a Renovation Loan to Improve My Home?
A renovation loan is used to help remodel or resolve structural issues in a home. This could mean minor improvements, major repairs or an upgrade in home amenities.
You can use a renovation loan at any point during your homeownership journey. You could buy a home that needs a little TLC with a renovation loan to pay for the house and upgrades. If the upgrades aren’t significant, you can even wait and make repairs during a refinance.
For those who already own a home, a renovation loan allows you to add in elements that will increase your home’s visual appeal, comfort level and resale value. Here are just a few upgrades that homeowners make using a renovation loan:
- New flooring
- New roofing
- Additional living areas and rooms
- Bathroom remodel or overhaul
- Kitchen modernization
What Are the Benefits of a Renovation Loan?
A renovation loan allows you to make professional upgrades using the equity you’ve built in your home. This makes financing easier with a renovation loan. For example, for big projects, you won’t have to pay out of pocket using a credit card or a personal check.
Another financial benefit of a renovation loan is that it grants you the ability to refinance your interest rate. When you use a renovation loan, you replace the mortgage on your home with a new loan amount that reflects your renovation loan and the upgrades made. If you purchased your home during a period of high-interest rates, this could be an opportunity to lower your monthly payments and make your home a more comfortable place at the same time.
After many years of working hard to build equity in your home, use that equity to create your dream home. A renovation loan not only makes your place more enjoyable, but you can also look forward to raising its value.
To learn more about how a renovation loan can help you, take a look at our article What Renovation Loan Options Are Available to Me?