Financing a Home Renovation in an Economic Downturn
No matter how long you’ve lived in your home, the odds are good that you have at least one home renovation project you want to get to. Maybe it’s replacing your roof or upgrading your windows. It could be tackling attic repair for better ventilation, installing solar panels, or updating your siding for better curb appeal.
Whatever project you have in mind, you might be holding off due to economic uncertainty. But is it in your best interest to delay home renovations during an economic downturn? You might be surprised to find out that there are perks to renovating during a recession. And to make it possible, you have many options for financing a home renovation project, regardless of economic uncertainty.
Pros of Home Renovation During an Economic Downturn
Despite what you might expect, there are specific benefits of renovating your home during a recession. Here are some of the pros.
Less Competition for Quality Contractors
Your preferred local contractor might be more accessible during an economic downturn due to other customers delaying their projects or bringing them to a halt altogether. Just make sure you research your contractor before signing any paperwork; during hard times, people may try to pose as experienced contractors just to get your money.
Increase the Value of Your Home
Home renovations can increase the value of your home overnight. Taking advantage of slower periods like an economic downturn to get that new roof or replace your windows can benefit you by increasing your home’s resale value.
Easier Than Selling and Buying a New Home
A recession or economic downturn can be a tough time to buy a new home. Depending on your project and your situation, selling your home and buying a new one may be far more expensive. Not to mention the amount of time and energy that goes into the home buying process!
Lower Your Energy Costs
Some renovations are cosmetic, and others are functional. New windows, reinforced insulation, improved attic ventilation, installing solar panels or solar roofing—these are all functional renovations that will lower your energy costs in the long run. An economic downturn is the perfect time to tackle such projects.
Financing Options for Home Renovation in an Economic Downturn
Just because there’s economic uncertainty doesn’t mean your home renovation is out of reach. Not every renovation is an inexpensive renovation, and it helps to have financing options. Here are some popular options for paying for your project.
If you have the money saved, paying for your renovations in full may mean you save the most amount of money. However, this isn’t always possible for everyone, especially when we’re talking about big, expensive projects. You may also want to pay for a portion of your renovations with money from your savings and then finance the rest. Talk with your contractor about your options.
Home Improvement or Construction Loan
There are numerous organizations that can offer construction financing, many of which are managed by your contractor. These loans are usually based on the value of your home after the renovations are completed. Bear in mind that these loans aren’t always simple to get, and they may come with high interest rates.
Home Equity Line of Credit (HELOC)
If your home has enough equity to cover the cost of your project, you might consider a HELOC. The benefits are that the interest rates are often low, and it’s a fairly straightforward process that’s similar to other lines of credit.
A popular option for financing home renovations is to refinance your mortgage. A cash-out refinance means you borrow from your home’s equity and then pay it off through your mortgage payments. This is a particularly popular option when interest rates are low, but beware that it likely means your mortgage payment will go up.
You can always pay for your home renovation project with a credit card, but beware of high interest rates. Make sure you can pay it off within a reasonable amount of time to avoid accumulating debt.
We Offer Financing Options
If you’re ready to get started on your home renovation project, whether it’s attic repair, roof repair or replacement, new siding, solar panel or solar shingle installation, gutter replacement, or window replacement, we can help you. We offer competitive financing options, and our team can walk you through all you need to know to make your decision.
We work throughout the Northern Colorado, Denver Metro, Front Range, and Colorado Springs areas, and every member of our staff is knowledgeable and experienced. Reach out to us today to talk about your home renovation project! 303-425-7531