Most homeowners have a (long) list of repairs and changes that they would like to make to their home; update the kitchen, change the paint in the living room, repair the crooked cabinet, remodel the bathroom, build a deck, etc. Sometimes the smaller items are able to be fixed fairly easily but the big changes, like remodels, updates, and additions are all put on hold until enough funds are served to get the job done.
Sometimes the smaller items can be fixed fairly easily but the big changes, like remodels, updates, and additions are all put on hold until enough funds are saved to get the job done.
Money stands between most homeowners and their American Dream of home improvements. Although expensive, that doesn’t have to stand in your way of completing your projects. There are numerous avenues available to current homeowners to help make repairs and renovations more affordable.
Several ways we can help you cross things off your honey-do list are through the following programs:
- Refinancing Your Home: If your current mortgage is not all that favorable, refinancing your first mortgage is the way to go; so long as you are not financing the repairs for longer than the renovation will take or last. You don’t want to still be paying for an updated kitchen after 10 years, only for it to need another upgrade.
- Home Equity Line of Credit: This loan works similar to a credit card; you draw out money as you need it and pay it back with (at least) the minimum monthly payment. The line of credit is limited to the equity you have in your home.
- Home Equity Loan: Allows you borrow a fixed amount and make a fixed repayment over a certain amount of time, usually 15 years but can be between 5 and 30.
- Construction Loan: Typically used to build a home or make major renovations, such as a major addition, that will cost more than the equity you have in your home. Construction loans are usually short-term and are refinanced into a traditional mortgage once the home or renovation is complete.
- FHA 203k Loans: Typically used to finance a house that requires a lot of repairs, but can be used to refinancing your current mortgage. Qualifying for this loan is like other FHA loans. With this type of loan, you will have to pay mortgage insurance for the life of the loan. The Streamlined 203k program will lend up to $35,000 to qualified borrowers for less complicated repairs.
- Reverse Mortgage: If you are 62 or older, you can get a reverse mortgage based on a percentage of the equity that you have in your home. These loans can be more expensive than refinancing your home or applying for a home equity loan. They are usually only attractive to homeowners because you aren’t required to pay them back until the home is sold or you move.