Hacks to Paying Off Your Mortgage While Spending on Home Improvements
Interest rates may be low today, but the cost of goods keeps rising. Hence, you can take out a loan easily but struggle to furnish your new home. As if monthly payments aren’t expensive enough, you need a few thousand dollars more to make your house a home. The average costs of furnishing a home with custom pieces run from $2,500-$50,000. If you’d hire an interior designer or decorator, you may spend an additional $50-$200 per hour.
Considering that the average monthly mortgage payment is $1,487, furnishing your home could double your outlay. What’s more, you need to account for your utilities and other expenses. The average monthly expense for a family of three is $6,178. If you’d perform a full-scale renovation, your spending could easily reach tens of thousands.
Thankfully, you don’t need to settle for cheap, low-quality furnishings to stick to your budget. Consider these hacks to pay off your mortgage without sacrificing a beautiful, habitable abode:
1. Choose a Reputable Mortgage Company
A reputable mortgage company can give you better interest rates than unknown lenders. Some lenders may offer more flexible repayment terms and unsecured loans, but you’d still get the shorter end of the stick if they charge high interest. On the contrary, reputable mortgage providers tailor their loan terms according to your credit and income.
For instance, if you have a high credit score and stable income, a lender may offer a shorter repayment period but lower interest. Unlike borrowers with a lower income and credit score, you’re not a default risk. Hence, your lender is confident that you can settle your mortgage in 15 years instead of 30.
However, a shorter repayment period means higher monthly payments. It can pose a challenge when you need to furnish your new home. Use an online mortgage calculator to set a realistic budget for your mortgage and home improvements. It will help you determine the type of mortgage you can afford with your current financial situation.
2. Visualize Your Home’s Interior Design Thoroughly
Furnishing a new home is exciting. It’s easy to race into a store and pick up everything that looks good. But you can’t buy the right items without a plan in mind.
Visualizing your home’s interior design can help you identify the exact items you need the buy. For instance, if the living room is bare, you’ll include couches, tables, accent chairs, an area rug in your shopping list. Then, you can set a budget for each item; $200 for a couch, for example. This approach to shopping can help you avoid getting sidetracked because you saw a cute chandelier or vase.
3. Furnish Rooms Strategically
With your vision and budget set in place, develop a strategy for filling each room. A sound strategy would be to focus on high-priority rooms first, like the bedrooms and the dining area.
Consider seasonal sale cycles when shopping. The winter may offer discounts on last year’s models, so look for marked-down mattresses and bed frames. Then consider buying second-hand for your dining room furnishings. You may find used premium dining sets on eBay or Facebook Marketplace for a fraction of the price of a brand-new but generic set.
4. Be Wary of Zero-interest Shops
Some furniture stores entice customers with zero-interest deals. But you can only avoid the interest if you’d pay your credit card balance in full. If you made partial payments, you’ll pay interest in the next payment cycle, losing any savings you would’ve generated if you paid in full.
5. Check Out Thrift and Consignment Shops
If you want to buy cheap furniture, avoid malls that usually offer them poor quality. Check out thrift and consignment shops instead. Examples are Salvation Army, Goodwill, Habitat for Humanity ReStore. You can buy a coffee from those shops for less than $100.
Plus, buying from thrift and consignment shops may allow you to support local artisans, craftsmen, and the projects of housing NGOs.
6. Consider Estate Sales
People who relocated, got divorced, or experienced a loved one’s death sometimes sell their belongings. Try visiting EstateSales.net to see if you’d find suitable furnishings for your home. Buying from estate sales may also allow you to help a grieving or financially-troubled person.
7. Get a Home Renovation Loan or Personal Loan
If your savings can’t afford your dream interior design, you can take out another loan. But treat this as a last resort. Lenders may deny you money if you’re still paying a mortgage anyway.
Also, a home renovation or personal loan may have shorter terms, making their interest high. Hence, they’re not the cleverest way to save on home improvements.
Take small steps when furnishing your new abode. It can help you gauge if your budget is too much or too little. Avoid spending a lump sum in one go because it may result in decorating mistakes that will cost you more in the end.