I really encourage clients to stay away from the finance companies and installment debt offered by any companies except banks and credit unions. These credit offerings from finance companies will typically fit in a situation where there's little or no equity in your property. In a scenario where you might need $5,000 - $20,000, an unsecured installment contract may work best. And when ALL THOSE OTHER options are exhausted, credit cards are going to be your only remaining option as it pertains to trying to get home improvement projects done.
In conclusion, if you can qualify for it, if you have enough equity, if your credit score is high enough, if you don't want all of the equity out of your property, your home equity line of credit is going to be your best bet. It's typically cost-free. It's quick. It's revolving so you can draw on it and pay it down, again and again. However, if you are you're receiving disability from the VA, and therefore are exempt from the VA funding fee, your VA cash-out refinance is a fantastic way to borrow money, as long as the new rate isn't too much higher than your current rate. I'm a big fan of borrowing “cheap money” if you're going to utilize it judiciously and responsibly. If you are not exempt, and you do have to pay the VA funding fee, know that a new loan at a slightly higher than market rate can cover a substantial amount of the closing costs, including some or all of the VA funding fee. As an example, if available interest rates are 4.00% – 5.00% for VA loans, the higher 5.00% rate would offer the opportunity to cover all of the closing costs and absorb nearly all of the VA funding fee expense. The higher rate could very well be a good option because nearly all of the closing costs would be paid for by the lender, leaving more cash out for you!
For assistance on determining which option is best for you, let So Cal VA Homes help. Call us at (949) 268-7742.