The 5 Best Home Addition Financing Options
Building an addition to the home you love can be an exciting yet costly prospect. Having the right home addition financing can take a burden off your shoulders and allow the process to go more smoothly. Out of all the financing options available, there are five finance home addition opportunities you should be aware of so you can choose the one that best suits your needs.
It’s possible to refinance your home in order to have enough funds to create an addition. Depending on the size of your project, you could even do this without increasing your current mortgage payment every month.
2. Home Equity Loan
This loan looks at the value of your home and uses that equity in order to receive a one-time loan with an interest rate generally less than a credit card. By using your home as collateral, you can make monthly payments similar to a mortgage that you pay over time.
3. Home Equity Credit Line
Another financing option is a home equity line of credit. The loan amount you receive depends on the equity your home offers. While there are interest fees, you only pay these on the money you use, rather than the whole line of credit amount.
4. Construction Loan
This choice can provide you with higher loan amounts since the loan is based on the current value of your home combined with the future value. In order for funds to be released to contractors, an inspector appraises the work to ensure it is completed first.
Lastly, you have the possibility to pay in cash. This can come from a savings account or even the sale of an old property. The important thing is, you are in control of the funds.
Get Your Financing Today
Options for home addition financing are varied, which means you can select the course of action that is right for you. Contact Bohan Contracting at 410-757-0971 to learn about the financing available to you, so you can get started on your renovation sooner rather than later.