It’s time! You are finally ready to make your dream kitchen a reality. You contact Maverick Home Remodeling, Inc., and we immediately start our pre-construction services and land on a project budget. (Read more from our blog on Realistic Remodeling Budgets here.) Then you think, “Oh gosh, how am I going to pay for this?” Luckily, interest rates are historically low and with that comes many financing opportunities available to you from our friends at Colorado Credit Union.
When financing your home remodeling project, it’s best to first look at the equity you already have in your primary residence. With equity, you are able to finance your project with a Home Equity Line of Credit (HELOC) or a Home Equity Fixed 2nd Mortgage. You’ll want to consult your tax advisor about any tax benefits of these options. But if you do not have enough equity in your home, other options are available to you through an unsecured personal loan, line of credit (LOC) or other personal secured installment loan.
A HELOC is a revolving line of credit with an adjustable interest rate that can be borrowed against and paid back multiple times - similar to the use of a credit card except a HELOC is secured by your home with a lien placed typically in a second lien position. When you pay your balance, the credit becomes available to use again. If you are looking at multiple remodeling projects for your home, or even thinking of consolidating high interest credit cards, this product may be ideal for you.
Click below to learn more about a HELOC from the team at Colorado Credit Union.
A Home Equity Fixed 2nd Mortgage is not a revolving line of credit but instead a closed end installment loan with a fixed interest rate and fixed payment. Much like a car loan, once you have paid the loan in full, the loan is closed and the lien against your home is released. This is a great product if you are looking to complete only one remodeling project or are planning to sell but would like to do some upgrades prior to listing your home. The interest rate is also fixed, which means they are locked. So if market interest rates rise, your interest rate will not.
Check out the most recent interest rates here.
In addition to these great home equity products, other opportunities are also available. If the necessary equity is not available in your home, there are products like a personal line of credit (LOC) or unsecured personal loan that can help to finance your home remodeling project. Since these products are unsecured, the amount of the loan is typically smaller and interest rates higher. You may also consider another secured loan. If you own a car and do not currently have a loan on it, it is possible you may use your car as collateral.
It’s always best to discuss your options with a loan officer. Fortunately, we have a great local credit union to “lien on” (pun intended!). Give Colorado Credit Union a call to discuss your options when financing your home remodel.
Colorado Credit Union
www.ccu.org
303-978-2274
HELOC Contact:
Shannon Kregg - (720) 981-2348 | skregg@ccu.org
Colorado Credit Union Centralized Lending Specialists:
Jamie Zimmerman
Karen Yamaguchi
Shannon Kregg
