Borrowing to renovate your home
Is your home looking a little run down? Getting tired of that old kitchen or thinking of knocking down a wall for more space? Home renovations can increase the value of your home (depending on what you are changing or adding), but they can also end up costing a lot too.
If you donʼt have extra cash sitting around, you may end up borrowing against your home to help pay for the work, using a line of credit or a personal loan. This means the collateral you use to secure the loan (like your home) is at risk if you donʼt pay back the money. This route could cost you more than you bargained for. Consider the following BEFORE investing in your home renovations with borrowed money:
Borrow only what you can afford to pay back.
Monitor interest rates and inflation – small differences in rates can have a big impact.
Know the consequences of using collateral as security for your loan.