3 Ways to Pay for Your Summer Home Projects

Homeowners looking to take advantage of longer days and better weather may find summer the ideal time to start Home improvement projects, repairs or renovations they plan to do this year. Also, choosing the right renovations is a great way to increase the value of your home.

But with still-inflated prices and stress Housing market, it is important to properly secure the funds you need to complete your home improvements. Actually, a 2023 survey from Houzz Homeowners with projects planned this year expect to spend between $15,000 and $85,000 for higher-budget projects.

If you’ve put off the home project you were planning this summer, it’s not too late to get started. Also, now is a great time for homeowners Home prices are still high They also access additional funds through the equity built up in their homes.

Discover your home equity options and the rates you may qualify for here.

3 Ways to Pay for Your Summer Home Projects

You are planning to start a renovation or downsizing Home improvement this summerHere are three ways to consider project financing:

Home equity loan

Home equity loan Allows you to take a lump sum loan based on the amount Equity you have built in your home. This type of loan carries a fixed interest rate and you repay it over a fixed period of five to 30 years.

Because they are secured by the value of your home, home equity loans can offer Low interest rates than other lending options today. But that makes it imperative to keep up with your payments, so you don’t fall behind and risk losing your home.

A home equity loan can be a good option for your summer home improvement project if you know exactly what you want to do and how much it might cost. And while you can spend your home equity loan on anything, completing a home project is actually one of the best uses. That’s the reason The interest you earn is tax deductible When you use the money for qualified home improvements Outlined by the IRS.

Learn more about the best home equity loan rates available right now.

HELOC

Like a home equity loan, a Home Equity Line of Credit (HELOC) A way to borrow from the equity you have built up in your home. Upon approval, you will be given access to a line of credit based on your home equity, which you can draw on over a period of time. Once that period is over, you will repay the amount you actually borrowed in a Variable interest rates.

A HELOC may be the best option for your summer project if you’re not sure what the total cost will be, since you can borrow what you need at different points. This can be a good way to maintain the option to tap into more funds later or even next year. The Draw period HELOCs can last up to 10 years. As with home equity loans, if you use a HELOC to make qualified home improvements, you may also be eligible to deduct your interest payments from your taxes.

Compare HELOC rates you may qualify for here.

Cash-out refinancing

One option is to tap your home equity with a second loan or line of credit Cash-out refinancing. With this loan type, you can refinance your existing mortgage loan into a new loan worth more than you actually owe, then take the difference in cash.

Like a home equity loan, this can be a good option if you know the relative cost of your renovation or project and want to fund it in one lump sum. Cash-out refinancing can also be especially good for home improvements, since using your lump sum payment for this purpose may qualify you to deduct the interest amount from your taxes.

However, there are a few things you should consider before opting for a cash-out refinance. For one, check to see if the refinance you qualify for is lower than yours Current mortgage rates. Even if you can use cash today, opting for a higher interest rate can greatly increase the amount you pay over time. You’ll also want to think about how a rescheduled loan might change how much you owe on your overall loan term, monthly payments, and closing costs.

Considering a cash out refinance? Start exploring your refinancing options to learn more

Bottom line

Homeowners looking to start a home improvement project this summer have many options when it comes to getting funding Especially if you live in an area where Home values ​​are still high, you can tap into your home equity today to make the most of the current market. Depending on the specific project and how you want to distribute your money, a Home equity loan or HELOC With the bonus of potentially deducting your interest from your annual tax bill can help save you. Otherwise, a cash-out refinance may be an option if you think you can get one Good interest rate Than you are currently paying on your mortgage.

Learn more about home equity options for your home improvement project or renovation here now!