Whether you want to build up or build-out, a home addition is a sure way to boost the overall value of your property. However, it is a major undertaking, so before hiring a contractor for this project, it’s best to create a plan. One of the first steps you need to take involves creating a budget and thinking about how you’ll pay for everything, from the labor to the materials.
Fortunately, there are many different ways to finance your home addition.
Cash or Credit Card
One of the best ways to pay for your home addition is through cash. This is especially true if your credit score is preventing you from accessing lines of credit. While it may take longer to save before you can begin upgrading your home, having zero debt is a benefit. Meanwhile, for one-off projects, you can also use a credit card. However, don’t forget to pay the balance in full every month. Otherwise, you may have to pay interest changes, which are typically higher than other types of financing.
Home Equity Line of Credit
A home equity line of credit (HELOC) is a type of financing that can be a first or second mortgage that involves the equity you have earned. Your equity can be calculated by subtracting how much you still owe on the mortgage from the current value of your home. By using HELOC, you can use it against a percentage of that number at a variable interest rate. If you need a surplus of flexible money, HELOC is a great option, though you need to be extra careful when putting up your house as collateral. The bank can seize your house should you fail to fulfill your financial obligations.
If you’re not interested in getting a second mortgage, you may want to consider cash-out refinancing. With this, you replace your current mortgage with a new one that’s greater than what you owe on the house. This is a good financing option for homeowners who want to take advantage of a lower interest rate than their original mortgage. Keep in mind that it will also have a new interest rate and term length. The only difference between what you owe and the new mortgage amount is how much you can use to fund your home addition
At Mass-Tech Roofing and Building Co., we offer our customers easy and affordable home improvement financing options for our services through a reputable lender, GreenSky®. With qualifying credit, you can quickly access low-interest loans to finance your home addition or any roofing or construction needs. Call us today at (781) 826-7663, or fill out our online contact form to request a free estimate.