When financing your home improvements you have several options, from friends to credit card to bank loans. In this economy it is not as easy as it used to be to get loans, but it is still possible.
- Contractor secured financing : Select contractors ( Sunset Home Repair for instance ) have agreements with financing companies that allow them to offer financing to their customers. This financing can range from fixed loans with monthly payments to same as cash financing for 6 months to a year. With contractor secured financing be careful and make sure to review the terms and look for any hidden charges. Some financing companies give kickbacks to contractors and hide fees in the small print. I know contracts can be long and the wording can be tricky but it is worth it to sit down at the kitchen table and read every word. If you don’t understand any section or something doesn’t sound right, call the financing company and have them explain it. For more details call Sunset Home Repair at 757-235-3320 or go to http://www.SunsetHomeRepair.com .
- Credit Card : Be careful when using a credit card because if you can’t pay it off quickly the interest will pile up so quick it will become impossible to pay off.
- Friends and family : I hate to even put this option in here but for some people it is a possibility. If you do go this route print up a legal agreement and sign it to give the lender some piece of mind. Also offer up any kind of collateral you can, this will also give piece of mind and maybe keep you a bit more honest. If you know your cousin is going to pawn your Babe Ruth rookie card you may be more inclined to pay your monthly payment on time.
- Sell something : I know some people would rather be homeless than sell their motorcycle and that’s good, because if half your roof falls in and the city condemns your house, you will be homeless.The fact is that most things go down in value every year and your house goes up in value. So if you have to sell something, that is going to be worth less money next year, to make sure your house will be worth more money next year you have made a smart choice.
- Refinance : If you have equity in your house you can refinance and pull some cash out. If interest rates are lower than the rate you currently have this can be a viable option.
- Bank line of credit : You can apply for a revolving line of credit at your bank. This will work like a credit card but at a lower interest rate. Although better than a credit card, if you can’t pay it off quickly the interest rates will pile up like with a credit card.
- Home equity loan : If you have enough equity in your home you can get a fixed loan from your bank secured by that equity. A fixed loan is good because you know how much you will pay every month and for how many months.
- Unsecured loan : If you have good enough credit you may be able to get a fixed loan from your bank although you don’t have enough equity in your home. These loans will most likely come with higher interest rates equalling higher monthly payments.
- Tile 1 loan : This is a Government insured loan and requires no equity in the home. Your home will be used as collateral and you will pay interest and closing costs. This type of loan can’t be used for luxury additions to your home and has a limit of $25,000.
- Borrow from you 401K : Some employers may allow you to borrow from your 401 K plan. There may be penalties and if you leave your job you will have to pay the balance in full. I would not recommend that you play with your retirement but if it is your only option you may consider it.
The methods described above are not the only options available. If you continue to think about and maybe even get creative you will be able to figure out a way to pay for repairs to your home. The most important thing is getting the work done before more damage occurs.
Whichever path you choose to take, just make sure you have enough money to pay the required amount at the end of each month. If you understand the terms and do your math correctly there should be no surprises and you will be able to have the work completed that will protect your home.
The season is upon us to rush out to the store to buy up bottled water and batteries for our flashlights. I know once the Weather Channel starts filming down to our south in Cape Hatteras the storm is coming! I wonder if they just rent a house down there for the season for their quick trips filming the vacationers soaking up the sun and the locals saying that they are preparing and staying put.
