A remodeling project gives you the chance to live in your dream home and boost your property value, but paying for it can be a challenge. Even a modest kitchen face-lift can make a significant dent in your finances. Fortunately, your home itself can give you access to the funds you need for a makeover, either through mortgage refinancing or other borrowing options.

What Are Your Financing Options for a Home Makeover?

1. Mortgage Refinancing

If you’ve built up significant equity in your home or the value has increased since you bought it, mortgage refinancing is a great way to access that value. Essentially, refinancing a mortgage means borrowing against the value of your home, paying off the original loan, and using the remainder for home renovations or other needs. Through refinancing, you may be able to get a lower interest rate than with other loans.

2. Home Equity Line of Credit

Similar to refinancing a mortgage, a HELOC allows you to cash out the value of your home with a revolving line of credit. It works like a credit card, and you’re allowed to withdraw money when you need it. You’ll only have to pay interest on what you actually withdraw, which can be ideal if you’re involved in a big project that requires several large payments. 

3. Home Renovation Loan

For borrowers who haven’t had the chance to establish much equity, a home renovation loan can be an accessible choice. The Federal Housing Administration offers programs to new homeowners who need to make cosmetic or structural improvements to their homes.

These loans typically have generous qualification requirements and low-interest rates, although the funds have to be used on an approved remodeling project. For example, the FHA 203(k) loan can be used by homeowners with a minimum credit score of 500, but it cannot be used on “luxury” renovations, like building a swimming pool.

Whether you’re remodeling your house or buying your first home, trust the brokers at The Sharon Thompson Team at Fairway Independent Mortgage Corp. to help finance your dreams. They work with a wide range of mortgage lenders and always provide a level of service that has made them the preferred choice for homeowners throughout Foley, AL. Follow their Facebook for lending tips and advice, call (251) 298-5304 to speak with an experienced mortgage broker, or visit their website to explore your mortgage refinancing options.