Using Structured Settlement Payments to Pay for Home Renovations
You spent a lot of time looking at places before you made the decision to buy your home. For you, it might’ve been the best choice, but that doesn’t mean that everything about the property is perfect. Chances are you had ideas on how you could improve your home from the first month you moved in, if not before. You’re not alone.
The Chicago Tribune covered a report by Harvard’s Joint Center for Housing Studies that estimated in 2016, American families would spend $310 billion on home renovations. You bought a good home, why not make it great?
Benefits to Renovating Your Home
Improving your home has a few obvious, immediate, benefits because you get to enjoy every renovation you make. You’ll be the one enjoying a game of pool in that finished basement, or taking a relaxing bath in that updated master bathroom.
But personal benefits aside, renovations may also increase the value of your home, putting more cash in your pockets when you decide to sell the property. In some cases, your updates will improve your home’s appraised value more than what you paid to make them. This isn’t guaranteed, since a future buyer might not share your idea of what makes the perfect home. However, this is something to consider if you’re thinking about updating your property.
Paying For Renovations
Home Renovations are expensive. According to Time Magazine, just replacing the fixtures you have in your bathroom could cost anywhere from $3,000 to $10,000 or more, and that’s with off-the-shelf products. Creating a master bathroom with some sleek custom fixtures can set you back $35,000 or more. Most homeowners don’t have that kind of money just sitting in a savings account, which means they’ll have to borrow it from somewhere.
Traditional Bank Loans
Banks and credit unions offer loans that you can apply for to find the cash you need. While these have higher interest rates than a mortgage, they also often have a shorter repayment term, helping you get debt free sooner.
Many home improvement stores offer store cards where they promise promotional interest rates of other incentives to try and get you set up. If you have an excellent credit score, or you’re planning on paying off everything before the promotional period expires, these cards can act as a sort of short-term loan. However, if you don’t pay them off quickly the costs can start to add up.
Credit card rates are typically much higher than bank loans, and you could end up paying potentially thousands of extra dollars in fees.
Other Sources of Funding
If your home decreased in value after you bought it, or if you had financial issues in the past, refinancing your mortgage might not give you the cash you need to make the renovations you want. It can also mean adding years to how long you’ll be making payments, which could lead to thousands of dollars in interest.
Bank loans require a lengthy application process, higher interest rates than home refinancing, and they are generally more difficult to get approved for. If you don’t want to borrow the money from traditional lenders, what other choices do you have?
If you have a structured settlement, you might have the option of using that money to pay for renovations by selling some or all your payments to get a lump sum of cold, hard cash.
Get A Lump Sum from Your Structured Settlement Payments
Selling your settlement payments means that you’ll spend your own money, not someone else’s, on your renovations. It’s your money, we just give you an option for using your cash when you need it.
When you sell your structured settlement payments there is no debt to worry about, no interest to pay. It’s your money; you’re not borrowing it from anyone. Depending on the size of your renovation project, you might not have to sell all of your payments, meaning you can get your lump sum and still receive a portion of your future payments.
For homeowners who want to limit the amount of debt they have, this can be a welcome, debt-free option for finding funds to pay for their planned improvements. If you have a structured settlement, and are interested in learning more about how you could use it to turn your home into somewhere you look forward to living in, get in touch. Our experienced representatives will go over your settlement with you, and give you some options of how we can help you convert it into a cash lump sum.
This blog post is intended for informational purposes only. J.G. Wentworth does not provide financial, legal, or tax advice. Please contact an appropriate advisor for such services.
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