Can You Get Loans for Home Renovations?
Over time, it’s only normal that people get a little tired of the same old look and feel of their homes. When that happens, many homeowners want to do something about it. More often, it isn’t just about the appearance of one’s home but more on convenience and efficiency. People’s needs change over the years after all. This naturally leads to people wanting to do some renovations around their homes. Home renovations can be a little on the costly side and not everyone can afford them. Thankfully, there is plenty of different types of loans available for people wanting to do renovations. So can you get loans for home renovations? Definitely.
Here are the different ways you can finance your renovations:
Credit Cards – Although this form of credit isn’t exactly what you would expect, it still can give you the means to get home renovations done without paying for them all at once when the job is finished. They are similar to loans in some ways too. That’s because just like a loan, credit cards are obtained after someone checks your credit history and income to debt ratio and finds you are in good standing with these.
Home Improvement Loans – This is probably the most difficult loan to get when it comes to doing renovations. That’s because the bank gives out the loan without having any collateral in return. This makes this loan riskier for the bank. With that being said, these types of loans still have a high approval rate if you are not asking for a huge sum of money for your home improvements.
Second Mortgage – We go from one of the hardest types of loans to get to one of the simplest. That’s because the bank has your house as collateral if you should default on your loan. There is usually one catch in getting this type of loan though because it’s based on you having built up equity in your home. Equity results when your home is worth more than you owe on it. So even if you have a good credit record, there is no guarantee you will get this type of loan if you have no built-up equity in your home.
Equity Line of Credit – This type of loan has many similarities to a second mortgage. That’s because it too is based on the equity value that you have in your home. Once again you will probably be turned down for this if you have no equity built-up in your home. This can be a better type of loan than a second mortgage too. That’s because it has no fixed payments and interest rates like a second mortgage has. Roughly explained, the money sits there in the account until you need it and only when you take it out does interest start to accrue and payments need to be made.
Other Forms of Home Improvement Financing
Sometimes you may have to think outside of the box to get your home improvement financing. This may involve doing such things as cashing in on your stocks or borrowing from your IRA. There are also various personal lending sources out there too. If you want to get the money for your home improvements bad enough, you will probably be able to find a way unless your credit is completely shot.
If you’re looking for professional yet reasonably priced custom home renovations in Orlando, Winter Park, Lake Nona, and surrounding areas, Posada Custom Homes is the company to call. Get a free estimate or schedule your consultation with us. You may reach us at 407-740-7707!