Adding more square footage to your existing kitchen is a great way to increase the value of your property. This is especially true if you are having plans to list your home in the future. However, like most home improvements, its overall cost requires a huge financial commitment on your part.
With that in mind, you must consider which financing option is right for you.
You can’t go wrong with having cash to jumpstart your kitchen addition plans. Here, you won’t have to go through the tedious process of finding the best interest rates, filling out paperwork and dealing with the financial obligations that come with taking out a loan. However, this option only works if you have enough money saved beforehand; otherwise, you’d be better off picking the next best option.
If the total cost of your kitchen addition amounts to about less than $50,000, a personal loan is a worthwhile choice. It is also known as an “unsecured loan” simply because it doesn’t require you to put up collateral just to get approved. Some loans come with higher interest rates, though these come with longer payment terms, which translates into lower installments every month.
This is a type of “secured” loan that uses the equity of your home as collateral for the lender. Also known as a second mortgage, the amount you are allowed to borrow will depend on the cumulative loan-to-value ratio of up to 90% of the appraised value of your home. This option may work if you are aware of the amount you need to get your kitchen addition started, but you’ll have to fulfill your financial obligations as soon as you take out the loan in a lump sum.
This is a great alternative to taking out a home equity loan. Here, your current mortgage is replaced with a new one that’s greater than what you originally owe, all with a new interest rate and the length of the term. The total of you’ll get for your kitchen addition is the difference between what you owe and the new mortgage amount.
To ensure the success of your kitchen addition, it is not enough that you have a solid budget. Having a reputable contractor by your side is just as important. And when it comes to improving your dated, crowded and difficult-to-navigate kitchen, Northside Construction Services is the name you can rely on in the area. Call us now at (404) 392-5858, or fill out our contact form for a free, no-obligation quote. We serve clients in and around Lawrenceville, Johns Creek and Cumming, GA.
