Remodeling Loans – Renovation Financing

In many cases remodeling loans or renovation financing will be needed for updates and repairs to your home. These loans should increase the value of your home so it is important to consider what projects will offer you the best return on investment or ROI. Money spent on home improvements should also be added to your home’s overall cost bases so always keep receipts. Costs associated with remodeling could be deductible from any profits realized when you do sell. In this Complete Remodeling Guide we will point out some key factors that should be considered when planning a remodeling project and point you in the right direction when applying for a home Loan.

So which renovation projects offer a good ROI? Bathrooms, kitchens and additions almost always add value and top the list. A two bath home with only two bedrooms might require another bedroom that can also function as a den or Man Cave but marketed later as a bedroom. Maybe you have three bedrooms and only one bath. This home could use that second bathroom. How about your kitchen? Upgrades here can add value and functionality to your home.

Other top choices with good ROI are: new windows, new heating or central air conditioning, new roof, garage, deck or patio and landscaping to add curb appeal.

Once you have decided on the project your next step is to calculate the cost to complete it and add that number to the value of your home. This may also be a good time to get a professional cost estimate to check your numbers. The next step is to compare that number to the value of homes in your area. Are you over-building and thus making your home harder to sell? Are you making your house the nicest, largest and most expensive in the neighborhood? The key here is -Does Your Project Make Sense in the Market? One side point here is that if you plan on living in your home for a long time and selling is not going to be an issue then the ROI becomes less of a point. In that case if you want to do the project, then by all means just do it and forget the ROI.

Once you have decided which project you want to proceed with, checked the costs and potential ROI it will be time to start looking for a lender. Many homeowners elect to go to their current bank and ask for a junior lien or second mortgage that allows them to cash in on equity built up over time. Second mortgages are like your first mortgage and you may be required to pay closing costs. Check interest rates and costs at a few lenders as the APR and costs can vary widely and note that interest and closing costs should be deductible here.

Many take an alternative path with home improvement loans and get a home equity line of credit. Unlike the lump sum second mortgage a home equity line of credit allows you to control the amount of money you take out at any given time and thus have some control over the payments. This is a great option as you have the money there when you need it but don’t have to pay interest on it until you actually use it. It’s just like a home credit card.

There are many other choices of lenders besides your current bank but go slowly and do some checking on any lender you are considering. The internet is a great place to shop around to make sure you are getting a fair offer. We will provide you with a few here to get you started and you can check the AdSense links below for more options.

AMS Financial     We are “America’s Home Improvement Loans Leader.” We will find a home improvement loan for your financial situation because home improvement financing is our specialty. If you’re looking to finance a home improvement project, we know how to get the loans done fast and efficiently. If you’re looking for kitchen loans, sunroom loans, pool loans, or any other type of home improvement project, you’ve at the right place!

Wells Fargo    Our financing specialists can provide loan options that fit your budget and home financing goals, freeing you to focus on floor plans and faucet styles. As the nation’s leading lender to buyers of newly constructed homes4 and a leadership sponsor of the National Association of Home Builders, we know how to make the financing of your new home simple and stress-free.

FHA home loans    The Federal Housing Administration (FHA) makes it easier for consumers to obtain affordable home improvement loans by allowing loans up to $25,000 without any equity in the home. In other words, the loan can exceed the value of the home.

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