The garage is one of the most overlooked parts of the home, as many homeowners do not take nearly as much care of it as they should. Consequently, your garage space may be in urgent need of a remodel. Still, you might wonder how to find the funds for such a costly endeavor.
First, you must determine the scope of the project. Do you plan to repurpose the space or just make it look better? Answering this question will help you calculate the costs.
Another step is to look into various financing options and compare them. Consider a home equity line of credit (HELOC) or a home equity loan, as they offer many benefits. The former is especially worth examining, as it allows you to tap into the line as needed. Of course, going for a personal loan or borrowing money from friends and family are also attractive alternatives.
Here is a brief guide on how to finance your garage makeover:
Calculate the Costs
First and foremost, you need to know how much money you will need to finance your garage makeover. Doing so will help you set a budget and determine which financing option is best for you.
To calculate the costs, start by taking measurements of your garage and making a list of all the necessary materials and supplies. Once you have that information, research the prices and add them up.
It might be worth contacting professionals to help you estimate the costs of your remodeling project. Additionally, do not forget to account for the labor cost, as you will likely need to hire someone to do the work for you.
Consider a Home Equity Line of Credit (HELOC)
One option you might want to consider is a home equity line of credit (HELOC). This type of loan allows you to borrow against the equity in your home and gives you access to a line of credit that you can tap into as needed.
One benefit of a HELOC is that it usually comes with a lower interest rate than other types of loans. Additionally, the interest you pay on a HELOC may be tax-deductible. However, keep in mind that this loan does come with some risks, such as the possibility of your home being foreclosed on if you default on the loan.
Opt for a Home Equity Loan
Home equity loans allow you to borrow against your home’s value so that you can use the money for anything that you deem necessary. As such, this type of loan is a great way to finance your makeover.
A home equity loan is a lump sum loan that is secured by your home equity. Home equity loans typically have fixed interest rates, which can make them easier to budget for than HELOCs.
Since home equity loans come with flexible repayment options, you can pay extra on a monthly or quarterly basis. Moreover, you can borrow up to 100 percent of the value of your house, meaning that you will have ample funds to finance your garage makeover.
Nevertheless, one downside of home equity loans is that they require you to take on debt all at once. Additionally, if you default on the loan, your home could be foreclosed on.
When borrowing money, remember that there are all sorts of fees to consider. For example, closing costs may come into play if you choose a fixed-rate loan, while an application fee will be charged if you go for an adjustable-rate loan. In some instances, there is also a prepayment penalty.
Get a Personal Loan
If neither a HELOC nor a home equity loan sounds like the right fit for you, another option is to take out a personal loan from a bank or online lender. However, to obtain one, you should have a good credit score and a substantial income, as this is what lenders will look at when approving your application. If you meet these requirements, the best option is to go for a conventional loan where your rate will vary depending on your credit history.
It is worth noting that many personal loans come with higher interest rates than other types. So, you might want to double-check your other options before going with this one.
Borrow Money From Friends or Family
If you are struggling to find the funds for your garage makeover, another possibility is to borrow money from friends or family members. It can be a good option because you likely will not have to pay any interest on the loan.
Be careful, though, and make sure that you are not over-leveraging yourself, as this could jeopardize your finances and friendships. For instance, if you default on the loan, it could damage your relationship with that person. Additionally, if you do not repay the loan, the person you borrowed from could take legal action against you.
The Bottom Line
Remodeling your garage requires planning, effort, and a solid budget. However, the payoff will be worth it — you will have a versatile and attractive space that you can use to store any vehicles or equipment you want to keep in your home. Nonetheless, if you are planning to undertake such a remodel, you need to consider many factors beforehand.
To make sure that this project does not cost you too much, we have outlined several steps for you to follow. If you are ready to take on this challenge, you can start by assessing the costs and gathering information about the best ways to finance your garage makeover. Afterward, it is time to get down to the nitty-gritty of renovation.
With time and patience, you will create a fantastic garage space you can be proud of. Good luck!