When you think home renovations, you often think of luxuries like updated kitchens, bathrooms, and outdoor living spaces. Although those are all nice to have, there are some renovations you just can’t afford to put off. When something goes wrong with your roofing, plumbing, or the structural integrity of your home, emergency renovations are needed to rectify the matter.
Unfortunately, most homeowners don’t have that kind of money saved up, and therefore need to turn to others for help. Below are some options you might consider when home renovations just can’t wait.
Friends and Family
The first place most people will turn is to their family and friends. This form of borrowing is preferred mainly because there aren’t any eligibility requirements, you can negotiate repayment, and most people you know won’t charge you interest – especially when you’re in a bind. If there is someone close to you with deep pockets who is willing to extend the favor, this option has the fewest consequences and is your best chance for getting those renovations done without much of a hassle.
The bank tends to be the next place homeowners flock to when they’re in need of a large sum of cash for renovations and repairs. If you’ve been with a bank for several years, they are more inclined to extend a loan to you. You’ll be required to have a reasonably high credit score, a valid source of income, and collateral which in this case would be your home. You’ll be required to pay interest, which will vary depending on the bank and your credit history.
If there’s any equity in your home and you have a good credit status, you might consider taking out a second mortgage on the property from service providers like Eagle Home Mortgage to finance your renovations. Applying for a second mortgage is much of the same as it was obtaining your first. You’ll be required to gather your finances, have a credit background check, and will also have to pay a fee for the loan. If approved, you could get several thousand dollars with a range of 1 to 20 years to repay the balance. This option is ideal for those who won’t be able to pay off the renovation in a few years that would be provided by a personal loan from a bank.
If you have a retirement account through your employer you are entitled to borrow on the balance of the account. This option requires you to submit an application but does have fewer eligibility requirements than other funding options. As they already have proof of income and a payroll account to deduct payments from, your retirement account holder is more inclined to offer you the cash. The window for repayment is much smaller than a second mortgage, but interest rates are lower than a personal loan making it an option for those with poor credit.
Does your life insurance policy have a cash value that you can borrow from? Many forms of policies do, and this cash value can be borrowed on with few eligibility requirements and a reasonable amount of time to repay. Though the payout may not be as high as the other funding options, it can help to take care of smaller renovations or repairs.
If your home is in serious need of renovations, prolonging the matter will only lead to more damage and higher costs. The best option would be to start looking for avenues to fund the necessary repairs. Start by checking your own emergency savings account and then moving on to some of the options listed above. Be diligent in repaying what is owed to ensure that you don’t burn a bridge you may soon need to walk back over again.