According to a study by Brigham Young University, the more space you have within your home extension, the happier your family life is. In 2021, the average cost of a property per square footage was $184. So, it makes more sense to extend the family home you already have rather than try to buy a new one. But how do you pay for it?
How To Finance A Home Extension For A Happier Life?
Use Your Savings For Home Extension
The average American household has just over $17,000 in savings. While this is unlikely to completely cover the cost of extending your home, it will go a long way. Home guide reports that most homeowners spend between $22,500 and $74,000 extending their homes. Paying a large chunk in cash is interest-free. Borrowing less cash means you’ll owe less, and you’ll pay less in interest, too. This means the total cost of your dream home will be as low as possible.
Refinance Your Existing Home
It costs between $86 and $206 per square foot to extend a home in America. If you want to add something like an extra bedroom to your home, then you need to add around 224 square feet to your property. You’ll therefore need between $18,000 and $46,000. One way to get hold of a decent chunk of cash is to refinance your mortgage and use the money to pay for your additional room. You could also use a home refi calculator to see how much money you can save by opting for a loan with a lower interest rate. A recent survey found that 74% of Americans haven’t refinanced their mortgages. If you’re one of them, make sure you look into your options.
Home Improvement Loan
You can make your current home bigger by extending existing rooms rather than building completely new rooms. The benefit of doing this is that it’s more affordable, less invasive, and quicker. A home improvement loan can be a safer option in some cases. These types of loans are usually unsecured and have higher interest rates than secured loans. But they are less risky as your assets aren’t used as collateral. Home improvement loans can usually be obtained quickly, so they’re good if you’re planning a minor extension project rather than a big build.
A secured loan will give you access to a lump sum of money so that you can complete your home extension in one go. The money is secured against your property so you’ll get lower interest rates. However, you must pay back what you owe on time or you risk losing your home. As the amount of interest charged is lower, secured loans are best for big extensions, such as the installation of a new floor or multiple additional rooms.
Most Americans would love a bigger home. Thankfully, there’s no need to go through the hassle of moving as there are plenty of ways to finance an extension project so you can enjoy a more spacious living environment.