Do you want to increase the comfort and enjoyment of your home because you’re planning to be there for the foreseeable future? If your dream home is one renovation away, we’ve got a smart-money tip: reno and roll.
If you’ve owned your home for a few years, chances are you’ve been building up some nice equity. And with mortgage rates hovering around historic lows, this is a great time to look at rolling the cost of your renovation into your mortgage. In fact, you might find enough interest savings in your new mortgage to help knock down the overall cost.
Let compare two financing strategies: a line of credit or reno and roll, assuming current mortgage is $150,000:
Finance using a line of credit, which is an added expense to your current monthly mortgage payment:
Renovation Cost LOC+ Mortgage* Total
$25,000 $500 $749 $1,249
$50,000 $1,000 $749 $1,749
$75,000 $1,500 $749 $2,249
Reno and Roll
Roll the cost of your renovation into your mortgage and have one easy and much lower payment:
Renovation Cost Mortgage Monthly Payment*
$25,000 $175,000 $874
$50,000 $200,000 $999
$75,000 $225,000 $1,123
(*Assumes 3.5% 5-year, 25 yr am. OAC, subject to change. +2% monthly line of credit payment, monthly balance will vary depending on payments and usage. For illustration purposes only.)
Now close your eyes and imagine enjoying the renovation you’re dreaming of at your house. And using your prepayment options, imagine paying it off faster than you dreamed possible.
That’s a great Reno & Roll. Give us a call, and we’ll build a little R&R just for you.
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Rasha Ingratta & Mortgage Associates
By Mortgage Intelligence
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