Does your kitchen need an uplifting refresh?
As one of the most highly trafficked and heavily utilized rooms in a household, the kitchen – ground-zero for groceries and great tasting goodies — has always served as the heart and hub of the home. Quick meals at the breakfast bar, after school snacks from the fridge and food prep and cleanup at least three times daily for family members, friends and – very frequently, pets – can take a toll on sinks and countertops, appliances, cabinetry and flooring. And let’s face it, the degree of wear and tear on your kitchen from years of daily use is dramatically impacted by the number of people using it. Now may be the right time to consider the best way to finance a kitchen remodel.
Estimate the cost of your kitchen remodel to plan for financing
A kitchen makeover doesn’t have to break your budget. In fact, sometimes making small changes in some areas can look like big improvements allowing you to conserve your cash for larger purchases such as replacing appliances or cabinetry. As you stand back, then, and take visual inventory of the changes you want to make, your mental calculator kicks in as you estimate potential costs. Maybe now it’s time to figure out your best option for kitchen remodel financing.
How can I finance a kitchen remodel?
Well, have you checked your home’s equity lately? If you’ve been making regular payments on your home for several years, or if home prices in your neighborhood are on the rise, you may be able to tap into that equity. In the early stages of homeownership, most of your monthly payment goes toward paying down interest. But the longer you make your payments, they start to reduce the principal amount, which was the actual cost of the home when you bought it. This is when you start building equity and creating your own source of personal wealth because equity represents the amount of your home that you own outright. Your home’s equity may be your best option, allowing you to refinance your mortgage to finance your kitchen remodel.
Equity can be determined by subtracting the balance of your home loan from the value of your home. So, if your home is assessed at $225,000 and you owe $125,000 on your mortgage, the difference of $100,000 is the amount of equity you have in your home. You can turn that equity into money via a cash out refinance you can use to remodel your kitchen and even eliminate other major expenses, such as high interest credit card debt. And when you upgrade your kitchen, it’s likely to increase your home value, so it’s a win-win for now and later.
Using a cash out refinance for your remodel
Whether you decide to do a full blown kitchen remodel, or a DIY kitchen refresh, Freedom Mortgage can help you make it a reality with a cash out refinance loan. Similar to a standard refinance, but providing you the needed cash from your equity, you would simply take out a new loan for more than the amount owed and receive the difference in cash at closing.
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