The kitchen is dated. The bathrooms are in need of new fixtures because the old ones are not pretty, inefficient and sometimes leak. For many homeowners, that means it’s renovation time.
photo courtesy of valentynsemnov
All you can see in your search for what to do are dollar signs, because you know it’s going to be a costly venture…perhaps even costlier than what you think in making a thorough assessment.
If the kitchen’s going to cost $50,000 and each of the bathrooms $20,000, you’re looking at a major investment, and the first issue will be how to pay for it. There are at least four options.
One is to re-finance your mortgage. If the timing is right and your mortgage is up for renewal, that could be the simplest way and least expensive to absorb the renovations expense, because you can avoid fees for changing your mortgage.
Two is a home equity loan, in which you can establish a home equity line of credit, based by the assessed value of your home and how much is left on the mortgage. It will come with fees.
Three is open a personal line of credit that allows you to withdraw money for your renovation as you need it. You’ll need to make regularly payments and it will help if you already have good credit.
photo courtesy of valentynsemnovAnd four is a personal loan for a lump sum that you can repay over a number of years, at interest that is less than a credit card. Or it can be a personal loan at the bank of Mom and Dad, a wealthy family member or a generous friend. Going that route can mean quicker access to the funds you need…but can also come with unexpected stress.
Home renovation costs can also be reduced if you’re a do-it-yourselfer and can handle at least some of the work yourself, and if you have the time to be your own contractor — source and pick up the material yourself, and find and manage all the right trades.