If you’ve owned your home long enough to build up a significant amount of equity in it you may choose to leverage it as a home equity line of credit, or HELOC. The line of credit functions much like a credit card. You can use it to pay off remodeling expenses as you incur them, and you may then pay it down as you can afford to. This option may yield the lowest interest rates available, but you’ll need to plan to pay for closing costs as part of the project.
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Most HELOCs come with a variable interest rate, which means your monthly payment can go up or down. The amount of interest you pay is determined by a number of factors, including interest rate levels set by the Federal Reserve, investor demand for Treasury notes and bonds, and the movement of benchmark rates used by the banking industry. Each factor can affect your interest rate.
Interest rates. The less interest you pay, the more loan you can afford. An adjustable-rate mortgage (ARM) is one way to lower that rate, at least temporarily. Because lenders aren't locked into a fixed rate for 30 years, ARMs start off with much lower rates. But the rates can change every 6, 12, or 24 months thereafter. Most have yearly caps on increases and a ceiling on how high the rate climbs. But if rates climb quickly, so will your payments.
A credit card with an introductory 0 % APR is hands down one of the best deals in consumer finance today. If you qualify for the offer it is a great fit for home improvement purchases . Use it wisely and you can pay for large purchases such as home improvement over time with low, interest-free monthly payments. The trick in taking advantage of these credit card offers successfully is to remember the promotional time period and make every attempt to pay the balance in full before it expires. You can continue to make payments after the 0% period expires but this is where you will start paying interest. If you are faced with carrying a balance after the promotional period we recommend that you find another 0% offer and transfer the balance to the new card and starting a new 0% time line. In summary, a 0% card is usually the best option for large purchases such as home improvement if you can get approved.
Since these projects may involve some demolition and plumbing, you may want to consider a contractor. It is important to obtain several quotes that include the following: project start and completion dates, a guarantee to clean up debris, a warranty on the work, and a payment plan. Then, compare quotes to make sure you get a competitive price without sacrificing quality. Once you've found a contractor you want to work with, check out Citizens Bank's competitive home improvement loan rates to make these major projects a reality.
BB&T and SunTrust have merged to become Truist. Both institutions will continue to offer independent product lines for a period of time. This may include differing underwriting guidelines, product features, terms, fees and pricing. Our friendly teammates at your local SunTrust branches will be happy to walk you through their respective products. You can also learn more by contacting them at 800-SUNTRUST or SunTrust.com.
Home remodeling loans offer an influx of cash for homeowners with big remodeling plans but pocketbooks that won't quite stretch far enough for costly home improvements. When you own a home, remodeling loans can make it possible to build on an addition, put in skylights, add a pool or make any change you want. But you should know what to expect before jumping in and signing on the dotted line of a home improvement loan.