The holidays are coming! Many people are looking into a home improvement project to prepare for family and friends. Whether you are thinking about updating your kitchen or fixing a bathroom, it is unlikely paying cash for the improvement is an option. Continue reading to learn how you can utilize a home equity loan or line of credit for your home project through Mars Bank.
One of the most common ways to finance home improvements is through a second mortgage in the form of a home equity loan or a home equity line of credit. Home equity loans are secured by the value of the home. As a result, home equity loans and lines of credit may offer lower interest rates than other loan types.
A home equity line of credit has a variable interest rate that may fluctuate with market rates. Home equity lines of credit are useful for ongoing renovations because instead of receiving the full amount of the loan upfront, Mars Bank issues special checks to you which you can write for any need.
A home equity loan provides borrowers with the full loan amount and a fixed interest rate. Terms vary from 5 to 30 years to repay the debt with this form of loan. Home equity loans interest rates stay fixed for the life of the loan, which makes them best for homeowners who plan to pay off their loan over a longer period of time.
Personal loans may also be an option for a smaller home project. These loans are unsecured debt, meaning that you do not use your house as collateral. However, personal loans usually have a higher interest rate and a shorter term to repay the debt. A personal loan is a good alternative to financing a home improvement with a credit card.
Home equity loans are a great way to use the value of your home to finance home improvements, pay off higher-interest debt or take a vacation! The rate is locked-in. You’ll enjoy the convenience of affordable monthly payments over a fixed time period. Consult with a tax advisor to determine whether the interest you pay is tax deductible.
Contact us to choose the right loan for you!