There are several reasons why you might want to borrow money for home improvement, whether or not you were to use a “piggyback” loan (which is a loan that you combine with someone else’s to finance a particular type of home improvement) or whether or not you’re just financing your new home for an extended period of time.
Home Improvement Costs Increase the Value of Your Home
The sooner you complete home improvement projects, the sooner your home will appreciate in value. Simply put, the longer you finish the home improvement, the higher the value. Visit the SoFi website and get all the details you need to know.
This is because your home improvement projects often add value to the home. The home improvement itself creates value in the home as well. Furthermore, they increase the value of your home because your home improvement will take less time to complete, allowing you to more efficiently use your time to invest in other areas of your home, such as vacations or home improvements that add value to the home.
Home Improvement Costs Can Save You Money
Once you complete the home improvement projects, you’ll use less materials to complete the project. So you’ll save a significant amount of money by using a piggyback loan to finance the home improvement. The savings can add up quickly, particularly for big projects. For example, for a remodel of your kitchen, you can look at saving $5,500 if you use a piggyback loan.
3. Home Improvement Costs Can Improve Your Credit Score
Home improvement projects are often high-interest and carry high interest rates. If you borrow money to complete a major home improvement project, your rate of interest will be higher. But, if you use a piggyback loan, you can save interest, since you’ll be borrowing less money and paying more interest.
The result is that you’ll be able to get a better credit score. The result of using a piggyback loan is the same as borrowing from a credit union to make a down payment on a house. You’ll use less money to start with, which will lower your monthly payments. This will lower the interest rate on your loan, which will make it easier for you to pay off your loan in the future, resulting in a higher credit score.
4. Home Improvement Costs Can Improve Your Credit Score And Improve Your Credit History
Because you’ll use a piggyback loan to finance the home improvement, you’re already earning on your loans. However, using a piggyback loan isn’t limited to just paying off your loans. You can use it to improve your credit score. In addition to getting a better credit score, you’ll also likely improve your credit history by repaying your loans in full.
5. Home Improvement Costs Can Lower Your Monthly Payment
If you decide to use a piggyback loan to fund your home improvement, your payment rate will likely be lower than you might expect. To use a piggyback loan, you can choose one of the following rates:
Annual Percentage Rate (APR). Like a personal loan, piggyback lenders also have an annual percentage rate. If you agree to a monthly payment based on the rate that the lender’s offers, you can expect your payment to be lower than what you would pay without using the piggyback loan.