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Different Types Of Loans
That Can Help You With
Your Renovation

home equity articles and tips

 

Whether you have owned your home for years or just bought a fixer up, there will come a time when you need renovations. Renovations can be part repairs and part remodel to something more modern or appealing to your taste. From new paint to new countertops your house will feel like a new home inside and outside with a renovation. However, renovations can be expensive. You will want to have enough money to pay for the renovations. Here are some loan types you can use to cover part or your entire renovation project.

Home Mortgage

If you are buying a home that is a bit of a fixer upper, you might be able to include the cost of the renovation in the mortgage. Student Works Painting, leading painting contractors in Edmonton, has had several clients who have gotten part of the cost of their services included in the original mortgage. This is much easier if you have purchased the home for below market value due to its condition or the seller’s need to move quickly.

2nd Mortgage

If you have lived in your home for several years and have built up some equity, you might be able to get a 2nd mortgage to pay for your home renovations. You do not necessarily have to use the same lending institution that wrote the first mortgage to get a 2nd mortgage, so you shop the best rates. You will be putting up the equity in your home as collateral for repayment. However, a renovation will raise the value of your home.

Renovation Lending and Loans

Some banks and mortgage companies offer special renovation lending programs. Banks and mortgage companies understand that improving the property will raise the resale value of your home. You will want to talk to your bank first to find out what kind of renovation loans they offer. These loans will typically have a higher interest rates than mortgages and have a shorter duration.

Personal Loan

If you have really good credit, you might be able to qualify for a personal loan. These loans can be secured to cover all or part of your renovation project. The interest rate you receive on this loan will depend on your credit score, but will still be higher than a traditional mortgage or 2nd mortgage. The length of the loan will vary, but will not be as long as a traditional mortgage.

When it is time to renovate, it is time to find the funding. You do not need to spend all of your savings on the renovation, when there are loans available to cover all or part of the costs.