Looking to do some home improvements and/or repairs?  

Most homeowners typically think the only ways to pay for home improvements and/or repairs is to either pay cash or to put those expenditures on their credit cards.  Those may not necessarily be the best way for you to pay for them!

Consider these options:

~~  Home Equity Loan - This is a second mortgage on your property that's secured by the equity you've acquired in your home.  The rates on a home equity loan might be a little higher than your first mortgage, but these rates are typically better than you'll end up with on your credit cards.  Another big reason to consider this route is that the interest you pay on a home equity loan may be tax deductible.  Interest paid on credit cards likely isn't.

~~ Home Equity Line of Credit - This is a variation of a home equity loan.  With this type of funding, you get a revolving line of credit which is secured by the equity in your home.  You can repay the amount you borrow, and then you can use it again and again as needed.  This type of funding is really useful when doing major improvements/repairs where you have to make multiple payments over a period of time to contractors as they complete specified stages of the work contracted for.  You'll typically have a variable interest rate on this type of loan.

~~ Cash-Out Refinancing - For this option, you refinance your existing mortgage into a new mortgage that is made up of your original mortgage plus whatever the amount is you want to pull out for your home improvements/repairs.  This option may allow you to obtain a lower interest rate, and the interest you pay is typically tax-deductible.
     An example of this is:  you have a $300,000 house with a mortgage on it of $150,000, and you would like to have $50,000 to do improvements, etc.  You would refinance your existing $150,000 mortgage plus the $50,000 for improvements, making your new mortgage amount $200,000.  You'll receive the $50,000 as a lump sum amount when you close on your new mortgage.

Make sure you choose the right project to spend your money on.  The right improvement can dramatically increase the value of your home, and those types of improvements that provide the highest return on your investment include remodeling kitchens, bathrooms, and second story additions.  Take care not to over-improve for your neighborhood, and remember that too much personalizing of your house likely won't appeal to too many mainstream buyers when it comes to resale value.

If you have questions about improvements that you're considering and how they'll impact potential resale value, feel free to contact me, either via phone or email.  I'll be happy to set up a time to meet with you.

Ann Cummings
Portsmouth New Hampshire
603-431-1111 x 3839