| Whether you are renovating a bedroom or adding a | | | | 5. Home Equity Line of Credit: This type of loan works |
| patio deck, you are going to have to plan for the costs | | | | by giving you an open line of credit. This type of loan |
| associated with the renovation. When planning a home | | | | does not usually have a fixed rate so interest rates |
| renovation project, it is important to choose the right | | | | depend on market conditions. This type of loan is good |
| home financing plan that meets your needs. | | | | for "pay as you go" renovation projects. |
| Choosing the right home financing plan depends on the | | | | 6. Bank Loans: Bank loans are usually taken out for |
| length of the project and how much you can afford to | | | | small renovation projects as they have to be repaid |
| pay for the project, When you take on longer | | | | within a few years. Make sure you check to see if |
| repayment terms, you will have to pay more because | | | | you have a fixed rate loan so you will not be |
| of the interest rates, however your monthly | | | | dependant on fluctuations in the market. |
| repayment fee will be lower. By determining the length | | | | The following is a list of tips to help you obtain the best |
| and costs of the project first, you will have an easier | | | | home improvement financing plan: |
| time choosing one of the following home improvement | | | | Know Your Final Costs: Before seeking home |
| finance plans: | | | | improvement financing, add up all the costs associated |
| 1. Unsecured Loan: Often referred to as a personal | | | | with the renovation project. Make sure you allow for |
| loan, an unsecured loan is a loan that is not secured | | | | unexpected costs. |
| against your property, but against your credit rating. | | | | Affordability: Make sure you can afford the |
| This type of loan is usually taken out for smaller | | | | repayments. Make a list of monthly expenses including |
| projects. You can obtain a personal loan from a bank | | | | your mortgage to make sure you have enough money |
| or lender. .The interest rates usually vary according to | | | | to repay the loan. Determine the amount you can |
| market conditions. | | | | actually pay each month. |
| 2. Secured loan: A secured loan is a loan that uses the | | | | Compare Financing Plans. Don't settle on the first |
| assets of the borrower to ensure repayment of the | | | | renovation financing plan. Check with three or four |
| loan. When you borrow money against your house or | | | | different lenders to see if you can get a better deal. It |
| vehicle, the lender is guaranteed to retrieve its money | | | | pays to shop around. |
| if you fail to make the repayments. | | | | Find a Reputable Lender: Make sure you obtain a loan |
| 3. Home Improvement Mortgage Refinance: | | | | from a lender that is known for its fair rates and |
| Refinancing your mortgage at a fixed rate allows you | | | | honesty. Read the fine print for any home |
| to use extra money for your renovation project. The | | | | improvement financing plan. Make sure you know if |
| repayment schedule is usually for 20 or 30 years, or | | | | you have a fixed or variable interest rate. |
| the term of your mortgage | | | | Because home improvement projects vary from |
| 4. Home Equity Loans: A home equity loan involves | | | | person to person, there are many types of home |
| borrowing against the equity in your home. You can | | | | improvement plans available. To acquire the best |
| receive a lump sum to pay for your renovation project. | | | | home improvement loan, it is important to do your |
| Obtaining a fixed rate will make repaying the loan | | | | research. No one wants to mistakenly add debt from |
| much easier. If you fail to make your payments, you | | | | a project that was supposed to add value to a home. |
| are at risk of losing your home. | | | | |