There's no denying it - home repairs are both expensive and necessary, especially given the chance of big storms happening in our Florida communities. Finding the right option for financing home improvement projects might be easier than you think.
If you find yourself in need of home repairs, check out these simple options to get the funds you need.
When interest rates are low, it may be worth it for you to refinance your mortgage for terms better than they were when you obtained the loan. However, this will only be beneficial for those who will get much better terms with a refinance -- you don't want to end up needing to refinance or take out a second loan in the future.
If you have a sound financial situation, including a strong credit score, applying for a line of credit can be a good way to finance repair and renovation costs. When you take out a line of credit, you only pay interest on the amount of money you take out, meaning that so long as you make your regular payments, a line of credit can be a great way to ensure that you always have funds available during repairs.
For those who need more structure than a line of credit, a home equity loan allows you to borrow a certain amount with the requirements that you pay back the loan over a given period of time. Most home equity loans have 15-year terms, but as with a mortgage, you'll want to ensure that you are getting the best rates and terms for your needs.
Credit cards will typically carry the highest interest rates of all of your renovation payment options, but, depending on the type of card you have, may end up paying off in the long run. If you are working on a single repair project with one-time costs, paying off your credit card balance as much as possible after that payment means you'll earn any rewards points or benefits, and you'll be done with your financial obligations without adding additional loans to worry about.
The Federal Housing Administration (FHA) loan program is designed to make financing available to a larger section of the population. FHA loans are insured by the government, which is why lenders can take the greater risk of giving loans to people who don't have stellar credit or established history. With an FHA Title I Loan, you can obtain financing for any needed home repairs -- from replacing appliances to repairing walls. Loans can be made up to $25,000, but if your loan is under $7,500, you likely won't need to provide any more security than your signature. As with any FHA loan, you'll need to find a lender who is approved and apply through them.
Necessary repairs to your home shouldn't be left undone because you can't pay for them. If you're ready to explore loan options, contact us today to learn more about our personal banking solutions.
Topics: Home Ownership
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