Property additions are a common alternative to buying a bigger house. With renovations, you may customize and ensure it matches your personal requirements. How to cover the cost of property additions in MA is offered below.
Personal Loans
Personal loans are not the best option but certainly can be used to fund property additions. Plan to pay more interest on personal loans than other kinds of loans. Additionally, paid interest is not deductible for tax purposes. Many people use these loans as an interim solution. Once additions are completed, your home value will improve. This might empower you to then get a home equity line or pursue mortgage refinancing. That money can subsequently be used to pay off personal loans.
Mortgage Refinancing
Mortgage refinancing is a common way to pull out equity without maintaining multiple loans. Furthermore, you can spread your property addition expenses over more years and take advantage of fixed rates. The amount of money you may take out depends on the specific mortgage program and the current value of your home. A down side of this alternative is the closing expenses.
Home Equity Line
If you have reasonable equity in your home, get information on a home equity line. Typically, you may borrow up to 80 percent of the market value of your home. A Home equity line has appealing rates and low fees. Interest payments can be tax deductible (check with an accountant to learn more). The loan length may be only 10-20 years and applicable rates can be variable.
Renovation Loans
FNMA HomeStyle Mortgages or FHA 203K loans allow you to finance improvements into your home with a refinance. Please see my other blog regarding these types of programs.
How To Cover The Cost Of Property Additions In MA
Speak with an experienced lending professional for information on these alternatives. Also, there may be special property addition loan programs for which you might qualify. Regardless of which one of the “how to to cover the cost of property additions in MA” above you use, remember that your ongoing monthly home expense will increase as a result. Prior to making a decision, understand what you can afford and what renovation is feasible with your budget.