Home
Improvement
Now
that you have been in your home for a few years and you have established
some equity, you may be considering doing some home
improvement.
Home
improvement comes in many forms. Such as a new kitchen, bathroom, roof,
siding, etc.
You
can acquire a home
improvement loan through one of three ways. Refinancing
with cash out, a home
equity loan, or a home
equity line of credit.
My
suggestion to you would be, a home equity line of credit. (HECL)
The
HECL
is a very convenient loan for a home owner because it is not mandatory
that you use the funds right away. And when you do decide to use the money,
you only use the amount you need.
Lets
suppose you have a home equity line of credit for $25,000.00. The lender
will give this money to you as a line for you to use, only when you choose
to do so. The line also comes with a check book so you can write checks
at your convenience.
A
refinance with cash out, or a standard home equity loan is given to you
in the form of a lump sum, and you begin paying the interest
and principal immediately.
On
the HECL you only pay interest and principal when you use the money, and
only on the amount you use.
So
lets suppose you hire a contractor to put a new bathroom in your house
for fifteen thousand dollars. Upon completion of the project, you would
than write a check from your HECL check book, it’s that simple.
At
this time, your monthly payments would begin to kick in.
Most
HECL’s are amortized over twenty years, and the payment is interest
only for the first ten. So make sure you are aware of the payment schedule
before you close.
Home
improvement is a great step to take with your home. It not only adds
value to your house, but it also improves the quality of your life. And
the interest is tax deductible. As always, continue to educate yourself,
and make sure you shop around for the best deal.
New
Home Construction
Don't
Let Bad Credit Stop You
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