Carmel Magazine Featured Article – Ways To Use Your Home’s Equity To Pay For Home Improvements
By Jennifer Goldsby
Here’s a summary of the article:
Are you planning a home improvement project? Instead of maxing out credit cards or liquidating savings, consider leveraging your home’s equity. Here are three smart financing options:
Cash-Out Refinance
This option allows you to borrow against your home’s current value, up to 80% with conventional and FHA loans, and up to 90% with VA loans. The proceeds can be used for home improvements, debt consolidation, or other purposes.
Home Equity Line of Credit (HELOC)
A HELOC uses your home’s equity as collateral, letting you borrow funds as needed. You can keep your existing first mortgage and take out a HELOC as a second mortgage. This flexible option allows you to pay down and reuse the line of credit, often with interest-only payments during the draw period.
Renovation Mortgage
Renovation mortgages let you refinance your existing mortgage and include the costs of home improvements. These loans are based on the future value of your home after renovations, allowing you to borrow more than a cash-out refinance. Options include conventional, FHA, USDA, VA, and portfolio programs.
Leveraging your home’s equity can make financing home improvements more affordable and potentially tax-deductible. Always consult with a qualified mortgage advisor to explore the best option for your needs.