No doubt, it’s a wise decision to transform your wasted basement area into a useful room. It’s completely your choice whether you transform your basement into a second living room or a dining room, you need to consider options for basement financing. Basement remodeling can raise the value of your house in addition to improving its functionality. When we talk about basement financing, it’s necessary that you choose the best option for basement remodel financing. Choosing a financing option that offers maximum freedom to the loan amount, loan term, and interest rates is a good idea.
Homeowners can get several benefits by utilizing a wasted basement space. Also, they will require less budget for the basement remodel project as there’s no need to build structural walls, roofs, and floors from scratch. The key factors that decide the basement remodeling budget is the types of fixtures and finishes a homeowner selects, including vinyl versus hardwood tile, drywall versus drop ceiling, and so on.
You may need a big sum of money if you opt for lavish fixtures and finishes. But nothing to worry about as it’s a great investment in terms of both home’s value and living space. Families spend maximum time at home, therefore, a basement remodel can provide space for kids playing and parents who work from home. Besides providing an additional space for personal enjoyment, a basement remodel can also increase home’s value when it’s the right time to sell it. Also, homeowners can earn an extra income by renting out their basement space.
Thinking about the best method to finance your basement remodeling project? Well, lots of basement financing options are available, including home equity loans, personal loans, credit cards, and contractor financing. Each of these loan types has some pros and cons. However, personal loans provide more flexibility in addition to fix monthly payments and loan terms.
The key benefits of a personal loan includes no lien against the property, no worries about payments increase if interest rates increase, and no minimum requirement for homeowner’s equity. If the homeowner gets a personal loan, then he/she can budget for exact monthly costs and the time when that loan will be paid off, usually more faster than other loan types. The drawback of a personal loan is that it is unsecured and interest rates can be higher in comparison to home equity loans.
Pros of basement financing
- A homeowner can finance a big house improvement project without requiring to pay a huge lump-sum amount.
- It will provide greater scope, increase in home value and usability.
- Personal loans are more attractive than other loan options as there is no minimum requirement for the homeowner’s equity. Furthermore, credit and income qualifications are comparatively easier to fulfill. Interest rates and monthly payments are fix for the entire loan term, and failure to pay back the loan doesn’t put your house at risk. Feel free to contact Penguin Basements for your basement remodel project.
Cons of basement financing
- Homeowner’s monthly budget may get distributed with loan repayment.
- There’s a lien against the property in home equity loans, which means your house will be at risk if you fail to repay the loan.