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<\/figure>\n\n\n\n1. A Home Equity Line of Credit<\/h2>\n\n\n\n
Similar to a credit card, a home equity line of credit or HELOC is a decided sum that you borrow from as needed. As a secured loan, the lender uses your home\u2019s equity to determine the amount that can be borrowed. Home equity is a number determined by taking the home\u2019s market value and subtracting what is still owed. Like with most credit cards, a home equity line of credit can be paid off at your own pace as long as you are making the minimum monthly payments. Once you are approved, you receive a checkbook or a credit card to access the money as necessary.<\/p>\n\n\n\n
Home Equity Line of Credit Pros and Cons<\/h3>\n\n\n\nPros<\/strong><\/td>Cons<\/strong><\/td><\/tr>Lower interest rates than HEL<\/td> Interest rates aren\u2019t fixed leading to unpredictable monthly bills<\/td><\/tr> Interest may be tax-deductible<\/td> Hidden fees for a home appraisal, application, an attorney, title searches and closing costs can pop up<\/td><\/tr> Flexible spending once the loan is approved<\/td> The application process looks at your credit score, active loans, and your financial history in addition to your home equity to determine the credit amount<\/td><\/tr> Interest accrues only on money spent, not on the full amount of credit available<\/td> Annual fees after the first year are common<\/td><\/tr> Some lenders will consider offering part of the loan with a fixed interest rate<\/td> Failing to make payments can lead to foreclosure on your home<\/td><\/tr> Monthly payments don\u2019t begin until you start spending some of the loans<\/td> The lender can freeze or reduce your line of credit if the value of your home decreases or your financial situation changes<\/td><\/tr> Fast application and approval processes<\/td> Some lenders charge penalties for inactive cards and cancellation fees if the credit line is closed out too soon<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n2. A Home Equity Loan<\/h2>\n\n\n\n
A home equity loan or a HEL is a secured loan presented as one lump sum using your home as collateral. The loan amount is determined by the home equity value, which is why many consider a HEL a second mortgage. Most lenders will offer loans in the amount of up to 90 percent of your home equity or less, which may or may not be enough to cover the cost of an inground swimming pool. For those seeking the finances to do one big home improvement project, a home equity loan is a great choice.<\/p>\n\n\n\n
Home Equity Loan Pros and Cons<\/h3>\n\n\n\nPros<\/strong><\/td>Cons<\/strong><\/td><\/tr>Lower interest rates than personal loans and credit cards<\/td> Higher interest rates than a HELOC<\/td><\/tr> Fixed interest rates<\/td> Defaulting on your loan can put your home at risk<\/td><\/tr> Interest might be tax-deductible throughout the life of the loan<\/td> Often comes with closing costs and fees<\/td><\/tr> Funds are delivered in one lump sum rather than a line of credit, ideal for installing an inground pool<\/td> Interest must be paid on the entire lump sum of the loan rather than on smaller increments as needed as with a HELOC<\/td><\/tr> The loan can be used for anything you want<\/td> Property value can drop, negatively affecting your home equity<\/td><\/tr> More time to pay the loan back, usually between 5 and 30 years<\/td> A HEL is offered at a maximum of 90 percent of home equity<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n3. A Personal Loan<\/h2>\n\n\n\n
If you have a good credit score, then you may want to consider a personal loan to finance your inground swimming pool. With the option to be taken out as a secured or an unsecured loan, it\u2019s not essential to offer your home for collateral and the quantity of the loan can be determined solely on your credit history. Low fixed interest rates are often offered to those with higher credit scores, but you can decrease the life of your loan or offerer collateral to get a lower rate if your credit history isn\u2019t flawless.<\/p>\n\n\n\n
Personal Loan Pros and Cons<\/h3>\n\n\n\nPros<\/strong><\/td>Cons<\/strong><\/td><\/tr>Interest rates can be lower than other financing options and credit cards<\/td> Fixed monthly charges don\u2019t allow for minimum payments like with credit cards<\/td><\/tr> There are no restrictions on how the loan is used<\/td> Bad credit will leave you with higher interest rates<\/td><\/tr> You can borrow any amount, as long as your credit score allows it<\/td> A processing fee of anywhere between 1 and 6 percent must be paid upfront<\/td><\/tr> Lower credit scores can still qualify for personal loans with higher interest rates<\/td> Lenders sometimes charge a prepayment penalty for paying off the loan early to make up for lost interest<\/td><\/tr> Fast application and decision process<\/td> Defaulting can lead to being sued by the lender<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n4. A Cash-Out Refinancing Loan<\/h2>\n\n\n\n
When making improvements that will increase your home\u2019s value such as adding an inground pool, consider a cash-out refinancing loan. It\u2019s done by refinancing your mortgage to an amount higher than what you owe. The remaining cash can be used to pay for your new pool\u2019s installation. You may also be able to refinance your mortgage at a lower interest rate, which will help you to save money as well.<\/p>\n\n\n\n
Cash-Out Refinancing Loan Pros and Cons<\/h3>\n\n\n\n
Pros<\/strong><\/td>| Cons<\/strong><\/td><\/tr> | Lower interest rates than HEL<\/td> | Interest rates aren\u2019t fixed leading to unpredictable monthly bills<\/td><\/tr> | Interest may be tax-deductible<\/td> | Hidden fees for a home appraisal, application, an attorney, title searches and closing costs can pop up<\/td><\/tr> | Flexible spending once the loan is approved<\/td> | The application process looks at your credit score, active loans, and your financial history in addition to your home equity to determine the credit amount<\/td><\/tr> | Interest accrues only on money spent, not on the full amount of credit available<\/td> | Annual fees after the first year are common<\/td><\/tr> | Some lenders will consider offering part of the loan with a fixed interest rate<\/td> | Failing to make payments can lead to foreclosure on your home<\/td><\/tr> | Monthly payments don\u2019t begin until you start spending some of the loans<\/td> | The lender can freeze or reduce your line of credit if the value of your home decreases or your financial situation changes<\/td><\/tr> | Fast application and approval processes<\/td> | Some lenders charge penalties for inactive cards and cancellation fees if the credit line is closed out too soon<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n | 2. A Home Equity Loan<\/h2>\n\n\n\nA home equity loan or a HEL is a secured loan presented as one lump sum using your home as collateral. The loan amount is determined by the home equity value, which is why many consider a HEL a second mortgage. Most lenders will offer loans in the amount of up to 90 percent of your home equity or less, which may or may not be enough to cover the cost of an inground swimming pool. For those seeking the finances to do one big home improvement project, a home equity loan is a great choice.<\/p>\n\n\n\n Home Equity Loan Pros and Cons<\/h3>\n\n\n\n
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