Part 2 of 4 for Refinancing: Using A Cash Out Refinance To Renovate Your Home
Renovating your home doesn’t come cheap. Depending on whether you are focusing on the exterior or interior, and which rooms you want to redo can have your costs ranging anywhere from $8,000 to $80,000.
So how can you go about getting the money to make improvements to your home? With a cash-out refinance, you’re taking out additional cash on top of what you owe on your mortgage, which can be a great way to make your renovation happen.
You Have Cash In Hand
While you can take out specific separate loans for home improvement, by getting a cash-out refinance loan you’re reducing the number of bills you have to pay and balances you have to manage. Plus, you’re free to use the cash any way you want, whether that means hiring others to complete the job or doing it yourself.
Any Size Renovation
With a cash-out refinance, you can take out as much or as little money as you need. If rates are better now than when you got your mortgage, you’ll also be able to save some money on top of accessing funds for remodeling. Taking out small amounts to make much-needed repairs in your home can also protect you from the threat of more significant damage in the future.
Building Your Equity
When you make certain home improvements, such as putting in a new kitchen or redoing your plumbing, you are adding to the value of your home. That means you can recoup your costs should you decide to sell, so the money you’ve taken out has increased your asset in the long run.
According to Remodeling Magazine, focus on the highest added value with these renovation projects:
- Replacing garage doors
- Replacing entry doors
- Remodeling kitchens
- Deck additions
- Remodeling bathrooms
- Replacing siding