Exploring the Finances behind a Kitchen Remodel

Kitchen remodeling in the Detroit, MI area is an exciting proposition for any homeowner. You can finally get your cooking space to your liking with updated appliances and extra countertop space. However, renovating a kitchen is one of the most expensive home renovations around. If you are doing a full remodel of your kitchen, you will not only need kitchen remodeling contractors from Detroit, MI but also plumbers and electricians. You may also need a carpenter to do finishing work. The average cost for a kitchen remodel is $20,000. If you have been saving for some time, you may have that cash on hand, but most people will need to look at financing options for their project.

Personal Loan

The simplest way to finance your kitchen renovation in Detroit, MI is an unsecured personal loan from a bank. The bank will give you a lump sum to fund your project. You must have decent credit to qualify for a loan. You also need to be aware of your budget. If possible, get a loan that is a little larger than your initial budget. A common problem for many home projects is unexpected expenses that add to the final cost.

Home Equity Loan

A home equity loan is another way to get a lump sum of money from a bank. You use the equity in your home as collateral for the loan. This means that, in order to receive a home equity loan, you will need to have lived in the house for a few years. These types of loans have fixed interest rates. You will have regular monthly payments over the term of the loan. They also have lower interest rates than unsecured personal loans. An important consideration in any kind of home equity product is that, if you are unable to make payments, the bank can foreclose on your home.

Home Equity Line of Credit

A home equity line of credit is a flexible way to fund your kitchen redesign in Detroit, MI. Like a home equity loan, this financial option uses the equity that has built up in your home through the years as collateral. Instead of a lump sum, the bank opens a line of credit up to a certain amount. Like a credit card, you only have to make payments when you make purchases. If you are able to cut your estimated costs, you will not pay interest on the money that you do not use.

Financing is an important part of the planning and budgeting process for a kitchen remodel. As you learn what banks are willing to lend, it may help you limit your design or give you the confidence you need to expand the project. Smart financing can put the kitchen of your dreams within reach.