Do you want to give your kitchen brand new look, but you are stressed because of high costs? Remodeling a kitchen is an exciting experience for all homeowners. However, the cost associated with kitchen remodels is typically high for many people. Kitchen remodels are one of the most expensive home improvement projects that a homeowner can ever undertake. In fact, it is actually the second most expensive home improvement project that you can do. Kitchen remodeling can cost you anywhere from $12,589 to $33,067. The average cost is about $21,668, but the cost can go up to six figures depending on how you want your kitchen to look. However, high costs should not discourage you. There are various financing options that you can choose to help you build your dream kitchen. In this article, we are going to discuss kitchen remodel loans that can help you achieve the kitchen you’ve been wanting.
Kitchen Remodel Loans
- Home Equity Loan
Did you know that you can have your dream kitchen just by applying for a home equity loan? However, this type of loan usually uses your home as collateral; meaning that you actually risk losing your home if you fail to make payments on time. Home equity loans can be compared to taking a second mortgage. This type of loan has a fixed interest rate, where you will be required to make fixed monthly payments as per the specified terms. The interest paid is tax deductible.
- Home Equity Line of Credit
If you are looking for a cheaper and more efficient way to finance your kitchen remodeling project, then look no further than taking a home equity line of credit. This type of loan is similar to using a credit card. You will use your home as security. Unlike a home equity loan, where you receive a lump sum, a home equity line of credit only allows you to borrow small amounts of money over a certain period of time. Interest will be paid only on the amount that you have borrowed. You need to have good credit history in order to benefit from this loan.
- Contractor Financing
You can also fund your kitchen remodeling project by using contractor financing. The only setback when you choose this option is that you only have one loan to consider. This means that you don’t have an option to compare other competitive payment plans.
- Personal Loan
If you don’t have enough equity to use in your home, then a personal loan is your best option. Personal loans are usually unsecured, meaning that you don’t have to use your house as collateral. The application process is quick, and once the process is completed, the money will be disbursed into your account immediately. They have a fixed interest rate and longer repayment terms. The interest charged will depend on your credit score. For instance, if you have a low credit score, then you will pay a higher interest rate.
Which Loan Should You Choose?
Remodeling any part of your home is extremely exciting — especially if it is your kitchen. These different types of kitchen remodel loans will help you take the next steps towards installing a new back splash, replacing your counter tops, etc. Regardless of the option that you choose to fund your project, it is advised that you consider all of the pros and cons of each option to make sure that you’re saving as much as possible.