TAbitha Posted August 25, 2010 Share Posted August 25, 2010 Fox Business reports that Americans are likely to spend a lot more than $ 121 billion on home improvement in 2010, so knowing how to finance home improvement is essential. Here are seven of the financing opportunities. Resource for this article:How to finance your home improvement projects Seven possibilities of how to fund home improvement Breaking a larger concept down into smaller parts makes it much less daunting; that contains when you're trying to finance home improvement. These are seven steps to solving this riddle. 1. Make use of cash According to Fox Business, about 65 percent of homeowners who invest in home improvement pay cash for the job. It's simple and you will find not interest fees with which to contend. However, a large cash outlay can certainly make it a lot more difficult to pay other bills if you aren't careful. Considering that as many as 85 percent of today's homeowners finance home improvement with cash, it seems that even more individuals are budgeting carefully. 2. Use some credit cards A senior researcher at the Center for Responsible learning, Josh Frank, reminds that revolving interest can keep you in debt for a while. Even the lowest credit card APRs are about twice the rate of standard home loans and home refinance loans. If you miss a couple of payments, it might even skyrocket to 30 percent or more. If you should use a credit card, do not use the card's cash advance loans feature, considering the interest rate for cash til payday loan via credit card is way higher than the standard credit card APR. 3. Using any personal loans Whether you go to a payday lender, a bank or a credit union, unsecured personal loans may be available, depending upon your relationship with the institution and your credit score. Within the case of payday lenders, having good credit is not required for personal cash loan . As outlined by Steven Rick of the Credit Union National Association, such personal loans (also known as signature loans) could be either higher or lower in rate than credit cards. It might just pay to shop around. 4. Utilizing any home equity loans Standards for home equity loans have increased with the housing bubble burst. You might get up to 90 percent of your current home?s value in a fixed rate 10-15 year loan with an excellent credit score. For Business explains that rates will be higher by a point or two than the average home mortgage. Fixed-rate loans make long-term budgeting much easier when you are trying to choose how to finance home improvement projects. Be wary of variable rate loans, as they'll not go lower and will only increase, especially if you have difficulty making payments on time. 5. Use a HELOC A home equity line of credit (HELOC) sets up an account where the money is there for home improvement if you need it for any reason at all, rather than coming to you in a lump sum as with a standard home equity loan. Make an effort to get a fixed rate rather than a variable one. 6. Getting an FHA remodeling loan The Federal Housing Administration (FHA) has a small remodeling loan program ? doing about 3,854 loans in 2009, according to Fox Business ? but if you are able to get in, you are able to borrow up to $ 25,000 for up to 20 years at a very reasonable rate. Loans more than $ 7,500 are secured by the home itself. 7. Use contractor financing Terms will vary here quite a bit, but if you can get a fixed rate, no points loan with no other hidden fees, a contractor loan can cost anywhere from 5 to 11 percent. It depends upon your credit score also as how much you trust the contractor. Do your research. Additional info at these websites Fox Business foxbusiness.com/personal-finance/2010/06/07/compare-home-improvement-financing-choices/ Link to comment Share on other sites More sharing options...
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