In a recent article we discussed which flooring offers the best return on your investment. Whether you’re looking at a complete kitchen remodel or a garage conversion it’s always worth considering ways of recouping your investment. In this home flooring guide we look at ways you can also make sure that you don’t waste money when paying for your latest home improvement. There are several smart ways to pay for new flooring in your home. Which one of these makes the most sense for you?
1. Pay with Cash
According to most personal finance advisors, if you’ve got the cash, you should use it on new purchases instead of putting them on credit or rolling them into some kind of a payment loan such as a home equity loan or mortgage. You won’t pay interest or late fees on things you’ve already paid for! If you are installing a less expensive option like sheet vinyl or linoleum tiles in a small space it just makes sense to save and pay cash.
2. Consider a Personal Loan
If you’ve got good credit, a good relationship with your bank or credit union and sufficient income, you may qualify for a personal loan. These are sometimes called signature loans because your signature is all that is required. You are not putting anything up as collateral, so a lien won’t be attached to your home as long as you make your payments.
3. Home Equity Loan
If you’ve got equity in your home, consider taking some of it out to pay for your new flooring. The lender will go through your financial information to evaluate you as a risk and consider the loan to value you’ve got on your home already.
4. Refinance your Mortgage
With low interest rates on mortgages, many homeowners are refinancing to complete home improvement updates like installing hardwood flooring or ceramic tile in their homes. If you can get a loan for at least 1% below your current mortgage, it might make sense to refinance. If you have sufficient equity in your home, you may be able to refinance your home for what you owe on it plus the cost of the flooring.
5. Roll it Into a New Mortgage
Let’s say you’re home shopping and are pre-approved by your lender for a $200,000 mortgage. If you find a home for $175,000 that needs $15,000 worth of new flooring, consider offering the seller $190,000 with the understanding that the seller will give you a check for $15,000 at closing. Some lenders are shying away from these deals, but many will still approve them.
These are the ways to pay for your flooring that make the most economic sense. It’s not wise to put the expense on a credit card if you’re not going to pay it off immediately. Borrowing against your retirement isn’t a good choice either.
Explore these 5 ways to pay for new flooring in your home and you may discover one or two that will work for you.
Did you recently install new flooring in your home? If so, share your financing ideas here.