Kitchen Remodel Financing
Upgrading your kitchen can be a very costly enterprise. The 2015 Cost vs. Value Report states that the national average for a midrange major kitchen remodel is just under $57,000, with the return expected to be about 67% upon sale of the home. Having the kitchen of your dreams doesn’t have to break the bank and there are many financing options to help you pay for the project.
Key tips for when you want to get kitchen remodel financing:
- The first step is to determine how much you need to borrow for your remodeling project. Bring in contractors for estimates or start shopping for the materials and appliances you want to get an idea of the scope of the project.
- Always add a cushion to your estimates to allow for any surprises or overruns. Anticipate at least 10-20% so you don’t have to scrape for funds at the end of the project, or worse, stop before it’s completed.
- Your kitchen remodel loan rates and the amount you’re able to borrow will be based on several factors: your income, your credit rating, the loan-to-value ratio of your house, available interest rates, and the loan term (length of the loan).
- Loans using your home as collateral typically have the lowest interest rates but you are giving up equity in your home if you are unable to pay them back or sell the home first.
- Always work with reputable lenders to find the best programs to meet your needs and your own financial circumstances. There are many options for financing a kitchen remodel and you need to compare rates, terms, points, and in some cases PMI (private mortgage insurance) if your loan-to-value (LTV) is greater than 80%.
No matter how major or minor your kitchen modeling plans are being prepared when seeking out a kitchen remodel loan can save you a lot of hassle during the project. Contractors will expect to be paid on time and new appliances will add up quickly. With a major remodel you may have to bring items up to current codes, which will also add cost. Be sure to factor everything in before applying for funding.
Advice on finding the best kitchen remodeling financing:
If you want the best kitchen remodel financing, you have to start by comparing loan options. Find reputable lenders that are well established in the industry. Make sure that they offer a selection of loan programs so you can find one that meets your specific needs. It’s best to shop around a bit and compare application fees as well as rates, points, and loan terms to be sure you are getting the lowest cost loan available. Finding the best plan will take some time to compare all of the different options.
Kitchen remodel financing will allow you to upgrade your kitchen with newer appliances, countertops, flooring, lighting, and increase the value of your home as well as your enjoyment of it. Be sure to do some research before jumping into a loan that will be with you for several years.
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