These days, homeowners are very busy renovating and improving their property, according to a HomeAdvisor survey. The homeowners who participated in that survey admitted they had spent an average of over $6,600 on repairs and improvements in 2018, and almost 50 percent of these homeowners were thinking about doing more renovations.
What is driving all this home improvement? Part of the reason is that a lot of potential buyers are buying places that need work as home prices are becoming so high. So, many people are remodeling rather than moving when they want more or better space.
Home renovations are a serious project. Many individuals renovate to update and upgrade their homes as well as increase property values. There are many ways you can pay for home repairs. Below you will find the three smartest ways to cover those costs.
1. Saved-up Cash
This option can be effective if you have a separate emergency fund saved and can save what you need before renovations become critical.
If you had saved up enough cash, you probably would not be reading this post as you are here to know how you finance your home repairs with your available funds! But still, the best way to pay for a home renovation is with the cash you've saved over the years so that you can keep your total debt at the lowest level.
Of course, your patience can wear down when you see your core rooms like the kitchen and the bathroom going down the drain. You know waiting until you have cash is not realistic at all as you should not delay critical repairs for a long time. If you neglect a leaky roof, it might turn into a bigger and more expensive problem.
However, if you are not sure how critical a repair is, especially for something like the roof or anything structural, consult a real estate professional such as a licensed a home inspector.
2. Home Improvement Loan
If you do not have enough cash in your savings to fund your renovation project, there is still hope; you can get a personal home improvement loan. This option allows you to secure loan money without putting your house at risk. If you go for an unsecured personal loan, you will probably get more than you can on a credit card.
However, pay attention: it is more sustainable not to borrow more than you need for your repairs. No matter how much you borrow, make absolutely sure that you know the amount of your overall monthly payments.
3. Home Equity Line of Credit
Using home equity is a viable option if you have at least 20 percent equity in your home and do not need over $25,000 as well as want to make a series of smaller home improvements.
The HELOC or home equity line of credit works in the same way as a credit card. You do not have to borrow and pay interest on the complete sum all at once. Instead, you borrow and pay as you go. With this arrangement, this option makes a HELOC an excellent choice for not-too-large renovations or a series of small home improvements.
Wrapping Up…Home repairs and renovations can be expensive to handle, but there are many ways to pay for them. So, you should plan your budget before embarking on a home renovation project as the cost of most repair works can increase considerably.