If you’re thinking of building a detached garage, you’ve no doubt wondered how expensive it will be. That’s why we created this simple calculator. Just enter the estimated cost to build a garage and you can see how much the monthly loan payments will be.
Garage Loan Options
Remodeling your garage can be fun and provide you with more storage space and less clutter, or you can totally convert it into an entirely different room altogether. Your options are endless, but the task of finishing or remodeling your garage can be very daunting, especially when it comes to price. Renovating a garage can average out at about $12,000 but the final price may be much higher depending on the work that is being done. Of course, it would be great to be able to just pay out of pocket with the money readily available, but not everyone has the money to do that. Therefore, there are various options for funding.
Before getting started, look into your financing options and pick the one that would suit your needs best. After you calculate how large of a garage loan you need, here are some options you will come across while figuring out how to pay for your updated garage.
Hire a Contractor
First and foremost, you may want to hire a contractor when looking to upgrade your basement. Many contractors are associated with lenders who can offer you a low-interest or interest-free loan. Most licensed contractors are reliable and can give you an honest price quote and what your expectations of the project should be. Of course, you would have to have the contractor complete work and would not have the freedom to do it all yourself. If you choose to go with a contractor, it is important to read your agreement thoroughly and understand all of the terms, including penalty interest fees if you do not pay off your loan in time.
Some lenders specifically offer loans for garage remodels. Oftentimes, your garage loan will get approved in just a matter of days. Sometimes, suppliers or builders will even offer you a loan for your garage, which is useful if you do not want to have to go through a lender. This is also handy because suppliers and builders will also have the experience to know how much your specific project will cost and can give you the best estimate and sufficient funds. The downside to these is that lenders usually do not offer many options and interest costs can hike up the overall price of your project if rates are high and you don’t pay the loan back in time.
Perhaps the most well-known solution to getting extra funds is through a personal loan. Personal loans can be obtained from your bank or a credit union, and many online companies act as lenders, too. You will normally be given several different options for interest rates, how long you need to pay off the loan, and so on. You can usually obtain the money you need in just a few days so your garage project can start immediately. Before signing on with a lender, make sure you read the terms regarding the interest rates you will be paying, any origination fees you may owe, and the loan restrictions the lender may have.
Home Equity Loans
Home equity loans are sometimes the best option for people, especially those who are certain they will be able to make payments in full. Sometimes, these are thought of as like a second mortgage because borrowers pay back the loan just like they pay their mortgage – at a set rate each month. Home equity loan amounts will vary based on factors such as your credit and the value of your home, but normally borrowers can get loans in amounts around 80% of their homes’ equity. Home equity loans oftentimes have a fixed interest rate, which can sometimes be really high; therefore, it is critical to make sure you will have the funds to pay your monthly price.
Home Equity Line of Credit (HELOC)
Similar to home equity loans but not quite the same, home equity lines of credit act more like a credit card because a lender will give you a specific cap on how much you can borrow and then you are charged interest on whatever amount you use. These are good for projects that will take a considerable amount of time, as you can “draw” from them for an extended period, usually ten years. These come with adjustable interest rates, which are good when rates are low but can be bad when rates are high. Sometimes, borrowers who opt for HELOCs are able to obtain a tax deduction for them if they meet the requirements. If this is the option you pick, you’ll want to pay it off in full; otherwise, since this option is closely aligned with your house, failure to pay could send you into foreclosure.
So start by using the garage loan calculator above to estimate your monthly payments. And now that you know what some of your options are for paying for your sweet upgraded garage, pick one and get started on it!