For a lot of homeowners, the home can be something of a project in addition to just a place of residence. From maintaining the yard to updating paint jobs, to building on major structural additions and everything in between, there’s always something to do to improve a property, and many homeowners find that this makes for something of an ongoing process.
In some cases, a significant change to the home can prove to be more effort, and more cost, than it’s worth. As has been identified here before though, there are several home upgrades that are worth every penny, from making adjustments to bring in more natural light, to redoing a bathroom or kitchen. These kinds of upgrades can improve your living environment and boost your property value significantly – not to mention they can provide you with a sense of accomplishment, and the feeling that your home is brand new all over again. That said, while we maintain that they’re often worth the cost, they can still be hard to pay for at any given time. So below, we’re providing some handy tips for how to fund your next major home upgrade.
1. Cash-Out Refinancing
Cash-out refinancing is perhaps the most traditional way to pay for a major home upgrade if you don’t have the funds for it on hand, or can’t raise them another way. That said, it’s also a fairly involved option, and one that you should only explore if you’re prepared to restructure the very nature of your homeownership.
NerdWallet characterizes cash-out refinancing as a way to replace your mortgage with a loan for more than you owe on your house, and essentially pocket the difference in cash. The same description provides an example that makes it a little bit easier to understand if it’s something you aren’t familiar with: If your home is worth $200,000, and your mortgage balance is $100,000 (meaning you have $100,000 in equity), you can replace the mortgage balance with a loan and refinance it for $150,000, receiving the extra $50,000 in cash. This can then be put toward the home upgrade of your choice, leaving you with a remaining loan balance akin to your former mortgage, to be paid back over time.
Again, this is an involved process and one that isn’t without its risks. Rates for repaying the loan can be high in some cases, and failure to make payments can actually put your homeownership at risk, given that the home itself is essentially collateral. However, with proper planning and a firm plan for paying back the loan, this option can still be one of the easiest ways to obtain a significant influx of cash to pay for a major home upgrade.
2. Title Loans
Various types of home equity loans will pop up as recommended options if you search around for ways to fund home improvement. They’re all worth exploring, though the cash-out refinancing option described above speaks to a similar idea. So instead, we’re recommending you also look into the idea of a title loan for which your car, rather than your home, is your collateral.
This is not quite as universal a concept as a home equity loan, but depending on where you live, you may find that there are actually some very favorable possibilities. The state of Ohio stands out as a leader in this regard: Title Loans by LoanMart provide Ohio residents with quick funding and flexible repayment options, allowing people to structure arrangements according to their needs. These loans are relatively easy to obtain, can be applied for online, and best of all, involve minimal risk regarding collateral. People can actually continue to drive the very cars they put up in order to secure the loans, all while enjoying gradual repayment schedules of up to three years.
Again, these kinds of title loans can vary from one state to another, but the policies in Ohio speak to the better versions of such loans you may be able to find in your own state. With this sort of policy, you may well be able to fund your next home upgrade without putting your own home equity at risk, and with a long, flexible timeline on which to repay the money.
3. Selling The Process As A DIY Guide
This is not as specific a suggestion, but it’s one that’s actually worth keeping in mind these days. If you’re the sort to approach a home upgrade from a DIY perspective, you may be looking at a process that will involve personal education, trial and error, the purchase of equipment and materials, and ultimately your own construction and renovation. It can be a challenging yet rewarding process, regardless of whether it’s your first time taking on a home upgrade or you’re fairly experienced with such things.
Often, a DIY approach can save you money in that you aren’t paying professionals for labor. However, the costs of materials (not to mention your own time) can still add up to make for a hefty tab. The suggestion here is that you may be able to offset that tab at least marginally by tracking, explaining, and selling your DIY process.
These days, people are always looking for examples and guides, which means there’s likely a market for this sort of activity if you’re willing to take the time to look for one. Maybe it means writing some articles about your process for home improvement sites that will pay you a small amount for your contributions. If you have some social media savvy, perhaps you can spread the word about a podcast or YouTube channel that will document your efforts. Whatever you try, we’re not talking about significant or sustainable income. But even the small amounts of cash you might make simply by documenting your DIY home upgrade can offset some of the costs.
4. Selling Your Things
Finally, and perhaps most simply, sell your things! If you’re looking into a major home upgrade, chances are you’re focused on home improvement in general, and part of that process can simply be getting rid of old items. Most homeowners can find at least a few valuable things to sell if they really put their minds to it, and there happen to be more ways to do it than ever before. Magnify Money has posted a detailed guide and comparison of mobile apps for selling your things, any of which can help you to get a good price for whatever items you might decide to unload.
While this is unlikely to result in a major financial windfall, it’s another way to raise a little bit of cash before starting a significant home upgrade project. Even a few hundred dollars raised through this method can go quite a long way!