How to Finance Home Improvement: Dig a Little Deeper into Home Equity

Were you able to accomplish everything you wanted to accomplish this year when it comes to improving your home? The year is just about over, and a lot of people have wanted to use their home equity, but for various reasons such as refinancing, education expenses for their children, consolidating their debt or many other reasons, they’ve elected not to. One of the biggest challenges people face is the fact that their siding or windows need to be replaced, but they are unsure of how to cover the costs.

However, many homeowners don’t have a good understanding of what equity in their home represents; what it is can mean a lot, depending on where you’re at in the life of your home mortgage. The equity is basically what your home is worth, after you take away the amount that’s still owing on the loan. The difference is where you will be able to get money back in order to use it for various other things that need to be done.  Keep in mind current value of the home, not what you paid for it.

A loan against equity that you have in your home tends to be at a low rate, and many customers like to refinance their mortgage into an equity loan rather than going through another traditional mortgage. If it is a traditional mortgage, there are going to be closing costs and other costs associated with this. Home equity loans usually have almost no costs associated with them, especially if you work with the lender who holds your current mortgage. The home owner is not able to escrow property taxes or insurance premiums with this option, though.  Here are some helpful things to know regarding home equity loans.

• Debt consolidating is a choice that can be done by obtaining cash from the equity on the home. If you find that making the minimum payments on those high-interest cards are not bringing the balances down fast enough, you’re going to want to be able to find a way to cover these costs.  What’s more, at current tax code status, home equity loan interest is tax-deductible, while credit card interest is not (talk to your tax professional, as there has been a recommendation to eliminate the mortgage interest deduction).
• Remodeling a home is a popular choice for home equity proceeds, since you can make more out of the home that you have using the equity you got from the home in the first place. Upgrade any of the rooms in the home or add onto it. The options are endless depending on what you’d like to do. This is where you could get the money for the new siding or windows on your home.  Keep in mind that you’re seeking an equity loan to increase the value of your home, which then translates into more equity.  That means you could qualify for more than you might think.
• College expenses can be rough if you’re unsure of how to pay for them. When you get your home’s equity tapped into, then you’re able to cover the college expenses that your child has.  If you’re looking at college costs down the road, perhaps now is the time to get a home equity loan to improve your home.  The added value can translate into more equity you can access when the time comes to pay that tuition.

If you’re ready to tap into the equity on your home and perhaps do some remodeling and upgrading of the siding or windows on your Minneapolis home, give Window Outfitters a call. We are able to provide all new siding and windows on your home for an affordable price and unbeatable service.  We are a full-service exterior home improvement contractor serving the greater Minneapolis area, including the communities of Lakeville, Bloomington, and Apple Valley.

 

 

Window Outfitters is a premier Window Replacement, doors, siding contractor and installer. As Contractor in the St Paul, Minneapolis, (Twin Cities) Minnesota (MN) metro, we proudly serve, but are not limited to, the following areas: Minneapolis Energy Efficient Vinyl Windows, Replacement Window Contractors Minnesota, Burnsville, Apple Valley, Lakeville, Savage, Bloomington, Edina, Richfield, Eagan, St Paul, Hastings, Minnetonka, Plymouth, Maple Grove, Eden Prairie, Farmington MN, Chaska, Shakopee, Chanhassen, Victoria, Mendota Heights Anderson Windows Minneapolis, Marvin Windows Minneapolis.