Tap into your equity or take out a personal loan to pay for home improvements. Here’s how!
What is home equity? Home equity is the difference between your house’s value and your mortgage balance.
A home equity loan will give you a lump sum to be repaid monthly at a fixed interest rate.
A home equity line of credit will give you access to money that you can use as needed. You will have to make monthly payments at a variable interest rate.Â
Using home equity is risky. If you don’t make the required payments, you can lose your house.
If you take out a home improvement loan, you will have a higher interest rate and less time to pay back the money, but you won’t have to use your house as collateral.
Think about the cost of your project, how much equity you have and whether you’re comfortable using your house as collateral.
