Many people today are staying in their homes longer, especially if they like their neighbors and the location. After living in the home for a period of time, they find they have outgrown the available space or want to make other changes to update the home’s look and appearance. Rather than sell the home, people are investing in home improvement projects to make the modifications they desire.
The costs for home improvements, like adding on additional rooms, can be substantial. Some people opt for a home improvement loan to help finance the project costs. However, home improvement loans are similar to second mortgages, where you use your house as collateral. The interest rates tend to be somewhat higher, meaning you will pay back substantially more in interest over the life of the loan. You will also have two separate mortgage payments to make each month.
A better alternative to make home improvements is with a cash-out refinance mortgage loan. This option often features the same or lower interest rate than your current mortgage. Instead of having two loans, you still have a single mortgage against the home with the principal balance now including the cash you took out for your home improvement project.
Regardless of the size of your home improvement project, a cash-out mortgage from Elite Financial can help ensure you have the funds needed to complete the project to your specifications. Contact us at 805-494-9930 for more details!