Home renovations are a fantastic way to increase the value of your property and improve your living space; but, with various financing options available it might feel difficult finding the right solution for you. Whether you’re dreaming of a new backyard oasis, updating your flooring, or installing new patio doors and energy-efficient windows, the costs can add up quickly.
The Costs of Popular Home Renovations
Before diving into financing options, let’s look at some common home improvement projects and their associated costs. Building a pool, for example, can cost between $45,000 and $150,000, depending on the size and features. Renovating a backyard to include landscaping, decking, and lighting can easily add another $15,000 to $50,000. Upgrading your flooring might set you back $5,000 to $20,000, depending on the materials chosen. The cost of updating and replacing windows and patio doors across a home can easily exceed $50,000 while doing a major kitchen remodel can likewise exceed $70,000. With these figures in mind, it’s clear that comprehensive home renovations can be a significant financial commitment.
Let’s take a look at a few home equity options that could be suitable for homeowners looking to make significant improvements.
Traditional Home Equity Financing
Many homeowners turn to Home Equity Lines of Credit (HELOCs) for renovation financing. While HELOCs offer flexibility, they also come with monthly payment obligations and variable interest rates that can increase over time, adding financial stress. Home Equity Loans are also gaining popularity, especially because many of them have a fixed rate and flexible terms between 7-30 years. However, with the current high interest rate environment a borrower may be looking at rates around 9% or higher. Additionally, selling other investments to fund renovations can lead to substantial capital gains taxes, eroding your overall wealth. The unpredictability of the stock market further complicates this option, as selling investments might mean missing out on potential future gains.
EquityChoice: A Smart Alternative
The EquityChoice loan from Newfi Lending may be a compelling solution for financially savvy homeowners looking to access their housing wealth. As a Shared Appreciation Mortgage with a 4.5% /4.839%APR*, note rate and zero monthly payments, this loan allows you to finance your home improvements without the burden of additional monthly payments. Instead, total repayment includes principal, fixed interest, and a Shared Appreciation amount that is tied to the future appreciation of your home. Furthermore, the EquityChoice loan deliberately excludes the value of any home improvements you may make over the term. This structure not only eases immediate financial strain, but it also makes long-term planning more manageable.
Financial Benefits of EquityChoice
Opting for an EquityChoice loan can save you from the pitfalls of other financing methods. Unlike a HELOC, there are no monthly payments to worry about, freeing up your cash flow for other needs such as home renovation and remodel projects. By avoiding the sale of investments, you can keep your portfolio intact and continue to benefit from potential market gains. Additionally, there are no capital gains taxes to pay, which can be a significant financial advantage. The fixed 4.5%/4.839%APR* note rate provides predictability, ensuring that you are not subject to the fluctuations of interest rates that can occur with HELOCs.
Making Your Renovation Dreams a Reality
Home renovations should be an exciting and rewarding process, not a financial burden. By choosing EquityChoice from Newfi Lending, you can fund your projects in a way that is convenient, economically advantageous and financially stress-free. Whether you’re building a dream pool, revamping your backyard, or upgrading your windows and floors, EquityChoice empowers you to enhance your home without compromising your financial stability. Explore the benefits of a Shared Appreciation Mortgage by calling us at (877) 676-3934 or emailing EquityChoice@Newfi.com. We have licensed loan advisors that can help you access the funds to make your dream home a reality.
*See terms and conditions that apply to any Shared Appreciation amounts you may owe on your Newfi EquityChoice Loan at Newfi.com/Equitychoice.