Home improvement can be a big investment, but it also pays off in terms of increasing your home’s value. A recent Zillow survey shows that 72% of homeowners have a home project on their to-do list in 2022. It’s a good idea to have a plan in place to make sure your money is well spent. This includes making a list of the work you need done. Then, compare the prices and timelines offered by multiple contractors.
When it comes to financing a home improvement project, it’s a good idea to look at a number of options. A personal loan may be the most flexible option for you. You don’t have to put up collateral and can qualify for a loan even if you haven’t established excellent credit. In addition, a home equity loan is a secure loan that allows you to borrow against your home’s equity. This may be a better choice if you’re looking to complete a large home renovation project at once. However, it’s important to understand that you’ll have to pay for the interest on the loan.
In order to qualify for a home equity loan, you need to have at least 20% of the home’s value. You can borrow up to 85% of the home’s value. These loans are installment loans that you repay over five to 30 years. You’ll be required to pay a minimum down payment and may have to pay an origination fee and closing costs.
To avoid falling victim to scam artists, you’ll want to look for a contractor with a license. The New York State Department of Consumer Affairs requires that you hire a licensed contractor to perform any home improvements. If you choose to hire someone that isn’t licensed, you could be facing civil penalties. For example, if you hire someone to do a project and they fail to complete it or fail to finish it according to the specifications, you can receive a civil penalty of up to $500.
In addition, you should ask to see the contractor’s insurance, references, and license. You’ll also want to get a contract that details the project, including the time frame and the payment schedule. This is especially important if you’re using a contractor who will be a subcontractor.
Before you begin your project, make a list of the things you need done. This list will help you identify which services will give you the most bang for your buck. It will also give you a solid basis for negotiations with a prospective contractor.
If you decide to finance your home improvement project, you should take advantage of an introductory 0% APR period. Most credit cards offer this introductory period, which means no interest on purchases during the first year. If you can’t qualify for a traditional mortgage, consider a personal loan. The APR is higher on a personal loan, but it’s much more convenient and flexible. You can often get a better deal on a personal loan than a credit card.