Do you know about home renovation loans? Generally, these happen when you’re buying a home that needs to be remodeled or repaired. A bank gives you money to pay for repairs as part of your first mortgage on the home. What about when you’ve already purchased a home and/or you want to remodel/renovate your existing home? In this case, it’s still possible to take a renovation loan but these are generally qualified for and approved differently.
The Advantages of a Home Renovation Loan
If you’re buying a fixer-upper and want to literally fix it up, a home renovation loan is nice because you only have one application and one mortgage to qualify for… and to pay each month. The loan gives you the ability to borrow more money based on the expected value of the upgraded home. The loan can be especially helpful if you plan to restore an older home. Money-wise, expect a lower cost because the interest rate is typically low and you’ll have a longer time period to pay back the loan. And, since you’re taking out only one first mortgage, then the interest (including the cost for renovation) will be tax deductible.
Are There Risks?
Keep in mind that if you do take out a home renovation loan there’s some risk involved. Will the renovations increase the home’s value enough in order to justify the cost of its purchase and renovation? Furthermore, you’re also set up to deal with all the headaches that come with actually making the renovations– challenges and expenses can quickly add up!
Find a Reliable Home Contractor
Thinking about renovating a house but you don’t want to do all the work yourself? Scott Merle Builders Inc. is a home remodeling contractor serving Central New York since 1975! Have Scott Merle Builders handle your renovations, which might include additions, window replacements, finished basements, sunrooms, and/or kitchen/bath remodels. Custom home renovations help increase a home’s resale value, making it better for those who live there now and for those who might live there in the future.