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Tips On Financing A Home Renovation Project

When it comes to financing your next home renovation project, there are many options you may not be aware of. It’s no longer necessary to gather up paperwork, put on a tie and take a trip to the bank.

Not sure what steps to take? No problem. Our team of home renovation experts are here to help. Check out this list of options to see what might be best for your home renovation needs.

Home Equity Loan

Much like a mortgage, a home equity loan is usually a fixed loan that you pay off over a term of 15 or 30 years. Although rates trend higher than traditional mortgages, it does come with the tax benefits of one and there are no closing costs. It’s based on the equity you have in your home and your credit profile.

Home Equity Line of Credit

Comparable to a credit card, this line of credit is available to you as you need it. Your lender determines the max amount you are eligible for, and then you are able to withdraw money as needed to cover projects, only paying back what you actually use.

FHA 203(k) Mortgage

Ensured by the FHA, these mortgages allow you to refinance your original mortgage and add onto it the costs of your home renovation. The amount you are approved for is based on the final value of your home post-renovation, so you are eligible to borrow more.

Energy Efficient Mortgage

If you’re looking to make your home more energy-efficient, you may qualify for an EEM. There are strict requirements for both the home and the proposed finished version, and a certified professional must conduct a home assessment to make sure that the home will be able to be energy efficient with the improvements planned.

B and C-Loans

For those with a weak credit profile, B and C loans offer an option for funding your home renovation project. These are ideal for those applicants who have a credit score of 650 or less but are building their credit.

Note that these loans generally have higher rates and fees than more traditional loans because of the additional risk to the lender.

Personal Loan

For a loan that borrows against collateral other than your house, personal loans are a solid option. These use your credit score and other factors such as your savings, retirement and investment accounts to determine your rate and the amount you qualify for. You may not be able to get as much as you would like, though, as personal loans typically range from $1000 to $100,000.

Ready To Renovate? Work With The Best.

The funding for your home renovation is within reach. Take steps to see which type of financing is best for your situation and contact the experts at Horizon Construction and Renovations.

Our extensive knowledge and combined experience makes our team the right choice, to make your dream into a reality. Contact our team online, or call us directly at (919) 542-4457 today!