Financing renovation (but no mortgage)
Question: I have some questions on financing a renovation project. We’re planning a big renovation project (~$120K). We own the house outright. – Could I get some other type of loan, using house as collateral?
Answer: A Home Equity loan (sometimes called a “Second Mortgage,” though it wouldn’t be “second” in your case), or a Home Equity Line of Credit (HELOC).
If you want ONLY a specific amount of money, for a specific term, the home equity loan is good.
If you want a “revolving” line of credit, on which you can write a check at any time, and pay off as you please (as long as you pay at least a monthly minimum, based on the outstanding amount), the HELOC is for you. However, some companies restrict the max amount of a HELOC moreso than a Home Equity loan.
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Filed under: Home Equity Loan
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