Life will sometimes throw us curve balls and we have to learn to stay on course and work through any situation that comes our way. You will find that you will have many ups and downs and often the down times will last longer than the good but there are ways to get what you want if you learn to manage your money and make good solid financial decisions. Making improvements to your home, remodeling your home and maybe even installing a new custom pool in your home is on your to do list but whatever project you have in mind you have to find a way to pay for it. Most of us don’t just have forty or fifty thousand dollars in the bank so where will we get the money to do the things we want to do? Let’s take a look at some of the options you have when it comes to financing home improvements.
Most banks and financial institution will offer traditional personal loans. These types of loans will pretty much go just off of your credit score and credit report so if you don’t have a credit score of at least seven hundred and fifty and good relationship with the bank, then you probably won’t get approved. Because there is no collateral in these types of loans to secure them the banks look at them as risky and they typically don’t just give these loans out to everyone. In order to save yourself some time and eliminate confusion you might want to run your credit report and get a credit score before you try getting one of these loans.
Home Equity Loans
Equity loans are loans that are based on the equity in your home. For example, if your home is worth three hundred thousand dollars and you only owe the bank one hundred thousand dollars on it, then you have about two hundred thousand dollars in equity give or take. These types of loans are quite popular when it comes to getting money for home improvements like finishing a basement, remodeling the kitchen, or installing a custom pools Montgomery. If approved for this loan the bank will place a lien on the home, which secures the loan with the home, until the loan is paid off. They will still check your credit for these loans but the standards to which they approve consumers is less strenuous because there is collateral involved which makes it a less risky transaction for the bank. You don’t have to get a loan for all the equity that is in home either. If you have two hundred thousand dollars in equity but you only need fifty thousand for your project then only get a loan for what you need. Don’t go overboard and overextend yourself because remember this money has to be paid back and paid back on time or they can foreclose on your home.
This is another option you have for financing your new pool or home improvement project. However, keep in mind that if you choose to use your credit cards to finance it you will be paying a much higher interest rate and if you only make the minimum payments it will take you forty years to pay it off. Just do the math on that. If you put thirty thousand dollars on your credit card, at seventeen percent interest, it would take you one hundred and thirty six months and cost you around eleven thousand dollars in interest charges to pay off the loan. Yes, credit cards are an option but they aren’t the smartest option and there are many other different avenues you can choose for financing your home improvement projects.