Skip To Content

Quick Tips for Financing a Home Remodel

When selling real estate, Green Bay, WI residents should first make sure their home is in great condition. If you want to make some home changes, but your savings account is a bit scarce, do not give up your plans just yet. There are ways that you can finance your home remodel that does not involve just going to your personal bank. You have options, even if you have a blemish or two on your credit report.

Get a Variable-Rate CD

If you do not need the remodel you want right away, this could be a good option for you. A CD – or certificate of deposit – is a way to save money and earn interest on your savings. You want a variable rate because a fixed rate does not allow you to add more money to it during the term. With a variable rate, you can add money to it. Unfortunately, the interest rate can fluctuate since this is variable, but you will earn interest either way. You will set this up for a period of time, typically a year, but some places allow as little as six months.

If you take the money out before the time limit, all generated interest is lost and there will be a penalty to pay. If you leave it in for the entire term, you will be able to keep the earned interest. So, this is a way to get the money without taking out loans. What is in the CD when you pull it out is what you saved, so you are spending your money and will not have to pay any of it back. This is a good option if you can postpone your remodel for at least six to 12 months.

Home Equity Line of Credit

If you do not mind spending the next three to five years paying off the money you spent on your remodel, then this is a good option for you. What is nice about this is option is you can receive a tax deduction from the interest. The downside is that this type of credit is not as easy to get as it was years ago. If interest rates go up, there is a risk that you will actually pay more for the changes you made than they are worth. Of course, you are also borrowing against your home so there is major risk here too. Foreclosure is a risk if you overextend yourself and are unable to keep up.

Refinance Your Home

If you plan on staying in your current home for some time, then this is a good option. This is especially true if you are planning a large remodel. You can choose a cash-out refinance. This means that you refinance at a rate larger than what you actually owe on your home, and then you will get the difference. For example, if you owe $30,000 on your home, you can refinance to an amount of $50,000 and then you get $20,000 that can be used for your remodel project. The bad part about this is that closing fees can be really high, as well as the threshold to qualify. It is a good option, but keep the disadvantages in mind when you are comparing the different options that you have.

Use this information to determine how to pay for the changes you want to make to your home. Completing these before selling ensures you have a better chance at being successful in real estate in Green Bay, WI.

Keyword: real estate green bay wi

Trackback from your site.

Leave a Reply