The kitchen looks like it came out of a magazine from the 1960s. The front porch is slowly pulling away from the house. And the garage door only closes half the time. As a homeowner, you know that you will need to make changes and improvements to your home over time to keep its value and keep it working. Some of these changes can be expensive. These days, the average kitchen remodel costs over $15,000. But a smart homeowner knows that by making these improvements now, they not only increase the value of their home if they ever decide to sell it, but they also make it more enjoyable to live in.
Over the years, refinancing has become a popular way to pay for home repairs and improvements. You pay off your current mortgage and get a new one, often with a lower interest rate. You can then use some of the equity you've built up in your home to pay for repairs and improvements. Many people find that this gives them a double benefit: they get the home improvements they've been dying to make, and they often get a big cut in the interest rate they have to pay on their mortgage. In fact, some homeowners find that the lower interest rate is enough to cover the cost of the improvements they make.
Some people are naturally nervous about taking money out of the equity they have built up in their home.
They might wonder if refinancing is even something they should think about. In the mortgage business, refinancing is a common thing to do, and most homeowners will do it at least once in their lives. It just makes sense from a financial point of view! Your house is probably the most valuable thing you own, so it makes sense that it's also one of the best ways to get cash.
If you want to make big changes to your home, you might find that if you refinance now to pay for those changes, you can raise the value of your home by a lot. For example, let's say you want to remodel your kitchen and add a back deck and patio. You refinance your mortgage and use the $30,000 you get from that to pay for the changes. After you're done, your improvements have made your $100,000 house worth more than $150,000. You used $30,000 of your equity to pay $100,000 for a house that is now worth $150,000. What a smart way to spend money!
Talk to your mortgage lender if you want to know more about how refinancing works. He or she can tell you about everything you can do. You can also check out other mortgage lenders online. You'll find that the market is competitive, which is good for customers in the long run. Putting two mortgage lenders against each other and making them compete for your business can often save you a lot of money.
So get ready to tear out that old kitchen, update those bathrooms, and add the library you've always wanted. A home refinance loan could be the way to get the remodel you've always wanted.
