Back How Refinancing Can Help Your Home Renovation
December 28, 2023
Home By Geneva >> How Refinancing Can Help Your Home Renovation
As the years go by your home can show signs of wear and tear. Bumps and cracks appear creating the need to apply some cosmetics and a little bit of TLC. Unfortunately, these repairs can be costly and may be difficult to pay out of pocket. However, refinancing can help give you the cash needed to pay for these expenses and make your home feel brand new again!
What is a Refinance?
To refinance a mortgage means to replace an existing mortgage loan with a new one. With a refinance, the principal balance of the existing loan is paid-in-full using the balance of the new loan. When the refinance is complete, your old loan is retired — replaced with new mortgage terms.
Benefits
There are plenty of perks that can benefit you in the long run by refinancing. This varies based on interest rates, home value, and credit score. One such way you can benefit is by renovating your home! Using options such as a cash-out refinance can give you the money you need to pay for repairs and renovations to your home! Here are a few ways refinancing can help with your home renovations.
Can Help With All Projects
Refinancing can help with projects both big and small. Whether you are adding on to your home or replacing the counter tops in the kitchen, refinancing gives you the opportunity and flexibility to do so! Big projects can revamp your home and lifestyle and even smaller projects can cause your home’s value to increase.
Lowers Interest Rate
Lowering the interest rate by refinancing can also help with home renovations. Having a lower interest rate saves you money in the long run, savings that can be used to repair or remodel your home! If you extend the life of your loan you may pay more over time but your monthly payment will be lower allowing you to save cash for renovations. The money you save over time can build up and be used for bigger projects or repairs as they come along.
Allows You to Hire a Professional
Getting cash from a refinance can help you avoid doing DIY home repairs. Extra cash from refinancing allows you to hire a trained professional and avoid the headache of doing it yourself! Hiring a certified professional ensures that the job will be done right and takes responsibility away from you for damages. If you do this yourself and cause damage to your home, you are responsible for the cost of fixing it.
Use Extra Cash for Other Projects
Sometimes the renovations cost less than anticipated. You don’t have to give that money back to the lender. When this happens, you can use the leftover cash to take care of other projects, debt, or purchases as you wish. Now you can finally replace that old dishwasher or help pay off other loans! The possibilities are endless!
Proactive Repairs to Reduce Long Term Costs
Refinancing to lower your interest rate, extend the life of your loan, and lowering your monthly payment gives you extra cash to work on repairs. If you jump on these early, it can prevent small problems from becoming big ones. This saves you money in the long run. It’s cheaper to replace a part on your A/C unit than to have the whole unit replaced. So if you refinance, put those savings back into your home!
Refinancing can be a valuable tool for homeowners. It can be helpful in a multitude of ways and using it to renovate your home is one of the biggest ones! Increase your home’s value and make your living space truly your own by refinancing today!
