Unlock Your Home's Potential
Instead of buying a new home, consider renovating your current one. Home improvements not only increase your comfort but can also attract future buyers. However, these upgrades can be costly and require upfront cash.
Fortunately, there are financing options to help fund your home improvements, such as a Cash-Out Refinance and a Home Equity Line of Credit (HELOC). Both allow you to tap into your home's equity, but they work differently:
- Cash-Out Refinance: Replaces your current mortgage with a new one for a higher amount, giving you the difference in cash.
- Home Equity Line of Credit (HELOC): Acts like a credit card, letting you borrow and repay funds as needed, up to your credit limit.
Each option has its unique advantages, so it's essential to understand both to make an informed decision.
Cash-Out Refinance
A Cash-Out Refinance lets you access your home's equity by replacing your current mortgage with a new one for a larger amount. After paying off your existing mortgage and closing costs, you'll receive the remaining balance in cash. Use these funds to improve your home with projects like:
- Roof, gutter, and downspout repairs
- Interior and exterior painting
- Kitchen and bath updates
- New windows and doors
- Energy-efficient upgrades
- Lead-based paint removal
- Deck, patio, and porch additions
- Landscaping improvements
- Basement waterproofing
- Washer and dryer upgrades
With sufficient equity, you can even tackle larger projects like full kitchen remodels, home office construction, or bedroom additions.
Home Equity Line of Credit (HELOC)
Unlike a Cash-Out Refinance, a HELOC provides access to a line of credit that you can use as needed. Similar to a credit card, you can draw funds for home improvements and other projects, then repay with interest. HELOCs have adjustable interest rates and require an additional payment alongside your original mortgage.
HELOCs typically have a 10-year draw period, followed by a 20-year repayment period. Funds can be used for various home improvement projects, from new kitchens and baths to patios, decks, home gyms, pools, and more.
To explore Cash-Out Refinance and HELOC options for your home improvement projects, try our refinance mortgage calculator or consult an experienced mortgage specialist.