Fall is a great time to take stock of any necessary home repairs and prepare for winter days ahead by making improvements focused on energy efficiency. Fortunately, you have several options for financing these updates:
Cash
The thriftiest way to fund repair projects is with cash. If the repairs you need are inexpensive, you may opt to use savings or simply pay for these costs out of your budget as they arise. However, depending on the cost of the repairs and the amount you have in savings, you may come close to depleting your resources for an emergency. It also may make more financial sense to use cash on hand for investments — potentially earning more than you might spend in interest on a loan.
Home equity loan
If you have equity in your home (the difference between the market value and how much you owe on your mortgage), a home equity loan may be a good option. Terms range from five to 20 years, and a fixed interest rate means your payments always stay the same. In addition, the interest on your home equity loan may be tax-deductible.
Home equity line of credit
Like a home equity loan, a home equity line of credit (HELOC) enables you to make use of the equity in your home. A HELOC offers flexibility because it functions much like a credit card: You’ll be approved for a maximum amount that you can draw from as needs arise. You only pay interest on the funds you’re using, and the interest may be tax-deductible*.
Cash-out refinance
If interest rates have decreased since you took out your mortgage, a cash-out refinance may help you kill two birds with one stone. First, you can lower your payments with a lower interest rate. Second, you can opt to receive an additional sum in cash to use for home repairs (or other expenses). With no points or closing costs, Rockland Trust’s Express Mortgage is a hassle-free refinancing option for loans up to $400,000.
Credit cards
You might consider using a credit card for repairs. While credit cards have the advantage of no additional upfront costs (like closing costs or home appraisal), unless you have an introductory rate, chances are that the rate is higher than that of a home equity loan or HELOC.
Contractor financing
If you’re doing a remodel with one particular company, it may be convenient to also have your contractor finance a loan. Terms will vary widely by contractor (and not all offer this option). Keep in mind that you could run into a sticky situation should you decide to part ways with your contractor.
Get started today!
Talk with one our experienced loan officers or visit a branch today to choose the option that’s right for you.
