Learn Easy Ways to Finance a Bathroom Remodel Even With a Low Credit Score
Now, we entirely understand that the first thought in your head would be, “Where on the earth am I going to organize this money from?”. But, let’s be honest, most of us don’t have that kind of cash hanging around.
But things are not as bad as they appear on the surface. There are several financing alternatives available to let you give yourself the pleasure of a pleasant bathroom.
The list of viable alternatives for completing your project is shown below. We recommend selecting the one that best matches your needs.
Alternatives for Secured Financing
They require collateral and are often provided by a bank. The collateral in this scenario is usually always your home.
1. Loans for House Equity
Home equity loans allow you to borrow against the value of your existing house. This strategy allows you to receive the entire loan at once and repay it over a period of 15 to 30 years.
Also, because interest rates are usually fixed, it is easier to budget monthly payments. Remember that your home equity loan payment will be in addition to your regular mortgage payment. It’s essentially the same as taking out a second mortgage on your home. We propose this ONLY if you can manage both payments at the same time.
2. Home Equity Credit Lines (HELOC)
Another option for homeowners who want to borrow money for home improvement projects or refinance their loan is a home equity line of credit (HELOC). A HELOC sounds like a second mortgage but operates similarly to a credit card.
They are basically credit lines that use your home as collateral in the event of a default. Essentially, you are given a large credit line from which you can borrow up to 80% of the value of your home.
Following that, you will only be charged interest on the amount you use. You have the option of withdrawing funds as needed. This can be useful, especially if your project extends several months and involves numerous structural adjustments.
Keep in mind that while some schemes require a minimum withdrawal, others may let you use your checkbook or credit card with no maximum restriction. Yet, there are no closing charges in any case. Furthermore, interest rates are flexible and linked to your home’s prime rate.
