Loans are often the best option of financing for remodeling your kitchen countertops, cabinets, flooring, and other permanent fixtures. Each of these projects involves an expensive demolition of the old materials and installation of the new by a licensed contractor.

You often cannot take your updated granite countertops, ceramic tile flooring, cabinets and stainless steel sinks and faucets with you if you sell the property. Nor can you return them to the manufacturer when you are finished using them.

Therefore, using unsecured personal loans as a method of financing or using the equity in your house as collateral are the two home remodel financing options that most people use to fund their renovation projects.

Contractor financing                                               

Many home improvement contractors, such as Stone Interiors Alabama, offer third-party kitchen remodel financing options to help you fund part or all of your project. This is a very convenient option as everything is handled by the contractor and the financing institution. All you have to do is complete a quick application and everything else is handled directly through the contractor.

Usually, contractors will offer a few different financing options depending on your credit history and amount you need to borrow. These can range from 0% APR loans that you repay the entire loan amount over a set number of months with equal payments each month. Stone Interiors, for example, is offering “6 Month No Interest Financing” for kitchen remodeling. Customers can apply for a remodeling credit card and buy kitchen countertops and pay them off over the next 6 months with no interest

Home-equity loan financing

You can get an Alabama Countertops Company that offers the tax benefits as a home remodel financing option, without the closing costs. You get the entire loan up front and pay it off over 15 to 30 years. And because the interest usually is fixed, monthly payments are easy to budget. The drawback: Rates tend to be slightly higher than those for conventional mortgages.

Low to no Interest Credit Card financing

If you have good credits, you probably get low interest credit card offers all the time. They might be in the form of a new card or checks you can write against cards you already have. It’s not uncommon to qualify for $10,000 of unsecured credit for 18 months at 3.99%. That’s a perfect amount for a small kitchen refresh like new countertops, floors, and lighting.

You really can’t beat that, as long as you pay it back according to the terms. Just be warned, if you go past the agreed upon repayment period you may end up owing a lot of interest and this option will not have been fiscally responsible.

Home equity line of credit (HELOC) financing

The most common and cost effective way to finance a kitchen remodel is to obtain a Home Equity Line of Credit (HELOC). A HELOC is similar to a credit card. It’s a revolving line of credit and your home is used to secure the loan.

Instead of receiving a lump sum like a home equity loan on Alabama Kitchen Countertops, a HELOC gives you a line of credit that you can tap into overtime. Tapping into the equity in your home offers you the flexibility to move funds in and out of the credit line as needed. You only pay interest on the amount of money you borrow.

But to qualify for a HELOC, you’ll need good credit. You’ll also need enough equity in your home. Most HELOC lenders require a combined loan-to-value (LTV) ratio of 70% or lower to qualify for a HELOC. The LTV ratio is your current mortgage amount owed divided by the appraised value of your home.

Ultimately, it’s your decision to decide which home remodel financing options work best for your particular situation.

Weighing the options to figure out what you qualify for, which option is best for you to acquire a financing for your countertops, how much you should request your loan to cover, and how much money you can contribute to the overall project in cash are all things you should spend some time mapping out so that you make the best financial decision for your family.

You can also talk to Stone Interiors Alabama to find out the types of financing options they have on countertops.