If you find yourself wondering how to fix your home when you don’t have the money, you’re not alone. Many homeowners in New Brunswick face this challenge, but the good news is that there are several ways to finance repairs by leveraging your home’s equity or other resources.
Driving through rural New Brunswick, I often see homes that have so much potential but are in need of repairs. Many of these properties sit on large swaths of land, and I can’t help but wonder if homeowners are aware of the options available to unlock the value in their home to improve their living situation. Whether it’s updating a home for comfort, increasing property value before selling, or making essential repairs to stay in your home longer, there are financing options that don’t require paying upfront. Here’s how you can fund home improvements without paying out of pocket right away.
1. Tap Into Your Home’s Equity
Your home is one of your most valuable assets, and if you’ve built up equity, you can use it to finance repairs and renovations. Overall, this is one of the most common ways to fix your home when you don’t have the money up front. Here are the best ways to access that equity:
Home Equity Line of Credit (HELOC)
A HELOC allows you to borrow against the equity in your home as needed, similar to a credit card. You only pay interest on what you use, making it a flexible option for financing repairs. Key benefits include:
- Lower interest rates than credit cards or unsecured loans
- Access to funds when you need them
- Interest-only payment options available in some cases
Second Mortgage
A second mortgage is a loan taken out against your home’s equity, separate from your primary mortgage. It typically has a higher interest rate than a HELOC but can provide a lump sum of cash for major repairs.
Mortgage Refinancing
If you have a significant amount of equity, refinancing your mortgage could allow you to access extra funds by increasing your mortgage amount. This can help spread the cost of renovations over a longer period with manageable monthly payments.
2. Consider an Unsecured Line of Credit
If you don’t have enough equity or prefer not to use your home as collateral, an unsecured line of credit may be an option. While interest rates are higher than those of a HELOC, they are generally lower than credit card rates. This can be a great way to cover short-term repair costs while maintaining flexibility.
3. Sell Part of Your Property to Fund Repairs
If your home sits on a large piece of land, selling off a portion of it could be a practical way to generate funds for repairs and upgrades. Many homeowners in New Brunswick own more land than they need, and subdividing and selling a portion can provide cash without taking on debt, and that is a great way to fix your home when you don’t have the money up front. To start, you may want to consider:
- Consulting a knowledgeable REALTOR® to assess your options and potential market value.
- Checking zoning regulations and subdivision rules in your area.
- Getting a professional land survey to determine how much land can be sold.
This option allows you to maintain homeownership while financing necessary upgrades, ultimately improving your property’s value and livability.
Additionally, I sometimes see homeowners who have inherited an old farm or a dilapidated property in addition to their own home. Often, they hold on to the property thinking it couldn’t be sold due to its condition. Rest assured, any property can be sold, regardless of its state. There are buyers out there for every type of property, whether it needs major repairs or is simply unused. Selling a secondary property that isn’t serving you could provide the funds needed to improve your primary home or even help with a move to a more suitable living situation.
4. Use Timber and Natural Resources on Your Property
If you own a rural property or have significant acreage in New Brunswick, you may have additional resources that can generate income to cover repair costs.
Selling Timber for Lumber
- If your land has mature trees, you may be able to sell them to a local mill or forestry company.
- Professional logging companies will often pay for high-quality timber, and you can use the funds to finance your renovations.
- Ensure you consult a forestry professional to assess the value of your trees before selling.
Leasing Land for Other Uses
- If you have farmland, consider leasing part of it for agricultural purposes.
- Renting space for recreational use, such as camping, could provide additional income.
5. Government Assistance Programs for Home Repairs in New Brunswick
The New Brunswick government offers financial assistance to homeowners who need to make repairs, improve energy efficiency, or adapt their homes. For a detailed breakdown of available programs, check out this guide to energy programs in New Brunswick.
NB Home Energy Assistance Program
- Helps low-income homeowners with energy efficiency upgrades, such as insulation and heating system improvements.
Total Home Energy Savings Program
- Provides rebates for energy-efficient upgrades, including windows, doors, and heating systems.
Homeowner Repair Program
- Assists low-income homeowners in making necessary repairs to ensure their homes meet health and safety standards.
Seniors’ Home Renovation Tax Credit
- Allows seniors to claim a tax credit for renovations that improve accessibility and safety in their homes.
Be sure to explore the full list of programs to see which ones you qualify for.
6. Fix Up Your Home, Sell It for More, and Downsize
If your goal is to move to a smaller or less expensive property, making repairs before selling can increase your home’s value and maximize your sale price. By using financing options to cover repairs now, you can:
- Attract more buyers and potentially receive multiple offers.
- Sell for a higher price and walk away with more cash in hand.
- Downsize to a smaller home with lower maintenance and expenses.
Final Thoughts
You don’t need to have cash in hand to fix your home. Whether through a HELOC, second mortgage, selling off part of your land, government grants, or even selling timber, there are many ways to finance home repairs without paying upfront. Investing in your home today can pay off in the long run, whether you choose to stay and enjoy the improvements or sell for a higher price.
Of all the above options, I find that many property owners elect to sell off land that they aren’t using to fund repairs and upgrades to their home. This way, you aren’t paying any interest and don’t find yourself locked into a mortgage or other debt if your home is already paid off.
If you’re thinking of downsizing to a more affordable property, consult a REALTOR® who can help you come up with a plan. You might be surprised, as you may not need to do any renovations before selling. Before making any decisions about refinancing, consult a financial advisor or mortgage professional to determine the best option for your situation.
If you would like to chat more about how you can fix your home when you don’t have the money, or have questions about selling your home before or after making repairs? Contact me, and I’d be happy to help you navigate the process!
