Paying for Home Improvement Loans Post Retirement
The time to retire has finally arrived. But while your days of working the nine-to-five grind might be history, that doesn’t mean that the need for home repairs and/or improvements are finished. A house is much like a living creature that needs to be well maintained or else it will fall apart and die an early death.
But what if you are living on a fixed budget and can’t exactly afford the tools, materials, and manpower to replace the heating system much less install a modern, more energy efficient and ultimately, cost saving kitchen? You need not despair because you have a variety of choices for coming up with that badly needed cash for keeping your home well maintained and up to date.
One of the popular options if not the most obvious is applying for a reverse mortgage loan. If you’ve lived in your home for decades and have been paying the monthly mortgage religiously, you can tap into all that equity you’ve been building up for decades.
Paying for Home Improvement Loans Post Retirement
If approved for a reverse mortgage, you can take your proceeds in one lump sum payment or monthly disbursements. To find out how much of a reverse mortgage you are eligible for, just use this handy online calculator (https://reverse.mortgage/calculator).
But what if you haven’t been in your home for very long and a reverse mortgage is not a viable option? What other choices do you have for coming up with the money needed to pay for home improvements in your post retirement years?
According to a new article, of all the people in the U.S. aged 50 or above, more than three quarters of them choose to remain in their residences after they retire. Or so says a survey recently conducted by AARP. Remaining in your residence provides certain benefits like independence, for instance. It also provides comfort, safety and of course, privacy.
Paying for Home Improvement Loans Post Retirement
But you need to keep your house up and that means repairs and renovations. Whether you’re looking into a new energy saving furnace, solar panel replacement or a new bathroom, the renovations you engage in will not only keep your house ship shape, but will boost its value.
However, the cost of renovations in the post-pandemic era of supply shortages and spiking fuel prices can put a strain on retired people living on a fixed income and who aren’t exactly in the market for a reverse mortgage. That said, here are some financial options you can research that will help you cover the high costs of home repairs and renovations.
HELOC or Home Equity Lines of Credit
The HELOC is said to be a popular method for paying for home repairs and renovations because it’s a secured loan backed up by the value of your property. A secured loan is always accompanied by a lower interest rate as opposed to a non-secured loan.
HELOCS also double as a line of credit which means you can tap into however much you need, when you need it. Experts say this is a very beneficial financing option for ongoing and/or prolonged renovation projects. Once approved the funds are said to be readily available.
Government Approved Loans
Those retired persons who are entitled to a loan approved by the government can save on both interest and insurance costs. One primary example of a government loan is a HUD Title 1 Property Improvement Loan. Experts say this is an excellent option if your home was recently purchased and you’re not in line for a reverse mortgage loan.
Keep in mind, the funds you receive must go toward renovations that enhance the overall livability of the home. Again, when you’re insured by the Federal government you will likely receive a lower interest rate than with a personal loan.
Home Equity Loans
A home equity loan is said to be similar to a HELOC, but it differs in that you “borrow a given percentage” as opposed to obtaining a line of credit. You have the option of paying on the interest on the entire loan amount until it is paid in full.
But, you also have the option of borrowing an additional amount if you wish to pay the loan back sooner than the terms defined in the contract. Home equity loans come with a fixed interest rate, which can make them more attractive when compared to the HELOC’s modifiable interest rate. On top of this, your home equity loan is tax deductible, which can further reduce the costs of home repairs and renovations after retirement.
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Paying for Home Improvement Loans Post Retirement