You set foot inside your new home but notice that it needs minor repairs. Your mortgage advisor cited you can apply for a 2nd mortgage if you wanted funds to support your plans for a renovation project. You weighed your options and decided to get a home renovation loan instead.
In this article, you’ll be presented with a brief introduction regarding home renovation loan and the different types it carries for your specific house renovation needs.
Home Renovation Loan Defined
When buying a house, you have two options to choose from: purchase a brand new property (newly-built) or purchase a pre-owned home. If you are lucky to acquire the former, you can immediately enjoy the elegance and grandeur of your home without any hitches. On the other hand, if you purchase the latter, you have the choice of either fixing your property or selling your house after a few years.
Most first-time home buyers normally purchase a pre-owned property. It’s cheaper and easier to maintain, most especially if it’s fully furnished upon acquisition. It’s best to consult with your mortgage advisor before buying a pre-owned house for more information.
A home renovation loan, therefore, is any amount borrowed to fund your property’s makeover. Renovating your house requires careful allocation of money because one simple fix can lead to a bigger expenditure if not planned properly. Make sure to contact a professional property renovator to guide you on how to pay for house renovations and help you save time and money.
Home Renovation Packages
There are several home renovation loan products you can avail of depending on your needs:
a. Fannie Mae HomeStyle – this is your all-around, all-inclusive single close loan covering both structural and aesthetic fixes.
b. FHA (203k) – this is a government-backed loan similar to Fannie Mae HomeStyle but given to borrowers with low credit scores.
c. EZ “C”onventional – this loan can be used alongside conventional loans to fund non-structural house repairs.
d. Jumbo Renovation – this is similar to EZ “C”onventional loans but reserved for higher-priced houses that aren’t included in other home renovation loans.
e. USDA Rural Development Home Repair Loan – this loan is funded through a rural development program assuring homebuyers secure, safe, and decent housing. Eligibility for this loan plan is based on your income and rural location.
You have to be creditworthy, hold a permanent job, and have a stable source of income before qualifying on any of the aforementioned home renovation loan types. While there may be other loan types available on the market, it is highly suggested that avoid dealing with or contracting unsecured home improvement loan programs.
Many of these flood the internet and are mostly questionable and managed by scammers. Always seek advice from a reputable home renovation advisor before proceeding, most especially if you’re a first-time house buyer.
Why Even Consider a Home Renovation Loan?
There are instances considering a home renovation will increase the value of your property. Many well-informed homebuyers will purchase a low-cost housing unit to renovate it and sell the property at a higher price. In your case, however, you may decide to renovate your house because you want a brand new style that resonates with your personality or you like to add additional features to make your dream house stand out in the neighborhood.
Whatever your reasons, a home renovation is an expression of your desire to improve the character of your property, increase its value in the long run, and leave an impression of wise financial spending. Considering a home renovation loan opens avenues for you to find the best options to finance home improvements and gives you more elbow room in making a well-informed decision.
Additional Tips for your Home Renovation Plans
As mentioned before, there are varied reasons why you should take a home renovation loan. However, you also have to carefully think about this move because this involves money, time, and effort. Any mistake is costly and you’d like to avoid this as much as possible.
The following are bonus tips upon dwelling on the prospect of having your house renovated:
a. Know the risks involved – make certain your equity is up to the task in supporting your renovation plans. You don’t want to end up defaulting on your monthly repayments.
b. Never invest too much in remodeling – unless you’re a retailer of renovated houses, you must avoid the temptation of giving more attention to restructuring the interiors and exteriors of your home. If only a dab of paint is needed to beautify a room, for instance, focus on budgeting your time and money in spray painting a portion of the space where it is needed only. Likewise, if you intend to add more pizzazz to your wall, hanging a simple but elegant-looking painting will do instead of installing expensive decors and carvings.
c. Never rush to makeover your house – you feel there is a need to renovate your property; hence, you immediately contact your interior decorator and then regret spending money later because it wasn’t that important. Don’t be tempted to renovate your place unless there is an urgency to do so (installing additional support to your property’s roofing and flooring to make them earthquake-proof, for instance). Remember that a renovation’s main purpose is to prolong the service life of your house and not to join a contest.
Renovation your home is one of the best things you can do to increase your property’s value. You give high priority to your property’s structural and aesthetical features because of the security and elegance it provides to you and your family. There are several renovation loan plans to consider based on your needs. Never deal with suspicious people purporting to provide you with funds for your renovation project. Make sure you speak only with a reliable and trustworthy home renovation professional for a well-informed decision.
Dominion Lending Oshawa is a trusted financial company that has helped 96 clients materialize their dream homes in Canada. Our vision is to help families build, develop, and/or improve their homes for them to live conveniently and comfortably.
Call 416-825-0142 or email email@example.com today to learn more.