1st Southwest Realty, LLC
1st Southwest Realty, LLC
Pat Hune, 1st Southwest Realty, LLCPhone: (480) 703-1976
Email: [email protected]

Funding Your Home Improvement Projects

by Pat Hune 10/18/2020

Photo by Analogicus via Pixabay

After settling into your home, you start to notice a few things either need to be retouched or completely overhauled. The biggest issue that a lot of homeowners run into is the money for the project. Even after assessing whether the project is a DIY or you’ll need a professional, funding still comes before action. Here are a few funding options to consider before you begin your home improvement projects.

Borrow from Your Future: 401(K)

A vast number of traditionally employed homeowners have a 401(K). Often, an employer will deposit funds into this account just as the employee does, but did you know you can borrow from it? If your housing project requires a little more than what you have in your savings account, try taking a little from your 401(K). Remember, even though it’s your account, it’s not free money. You will have to put it back once you’re able, and if you separate from your current company, you may run into a few extra fees if the money isn’t returned within five (5) years.

Government-Backed Improvement Loans

There are a few different types of government-backed loans that allow you to improve your home. You just need to identify the category your home improvement falls under. If you’re looking to do a few moderate improvements, try the 203K loan. These loans are great if you’ve purchased a preexisting home and have a few hefty renovations to cover. You can even add this loan to your mortgage payments.

If your home improvement project happens to fall more along the “greener” side of things, such as heating/cooling, water-efficient landscaping, energy reduction systems, etc., you may be able to apply for a PACE loan. These loans are pretty easy to get approval for, can often receive tax credits and may be sold to your next buyer when you decide to move.

Home Equity Line of Credit (HELOC)

Have you been in your home for a while? Maybe a HELOC would be the best method for you to finance your home improvement projects. Since your home has accrued equity over the years, you’ll be able to secure the loan by using it as collateral. These loans are often suited for long renovations or projects that may require a few extra stages.

If your home improvement projects end up with a longer price tag than you were expecting, don’t fret. There are several other ways that you’ll be able to cover the cost, including tax credits and grants. If you’re prepping your home to sell in the near future, chat with your agent about the best renovations, improvements and repairs, as well as, how to fund them.



About the Author
Author

Pat Hune

Designated Broker

Pat specializes in new, resale, bank owned and short sale residential and multifamily real estate in the Phoenix area.  A licensed realtor since 2001 Pat started her own brokerage in 2007.  She has a bachelor degree in Business from University of Phoenix, Broker's License, ABR and MSSC in addition to extensive real estate training.  Her professional affiliations include the Southeast Valley Association of Realtors, Arizona Association of Realtors and National Association of Realtors. She has traveled extensively including  Australia, China, Ireland, Israel, the Philippines, Malaysia, Canada, Costa Rica, Puerto Rico and Mexico. Prior to entering real estate Pat spent 20+ years in the electronics industry including 17 years at Intel.  Pat is originally from Ohio and moved to Phoenix in 1979. As a 30+ year Phoenix area resident Pat has extensive knowledge of many of the communities in the greater Phoenix area.  In her spare time Pat enjoys hiking, cooking, reading and herding cats.