Renovation Loan
Renovating your home can be a significant investment, but it can be challenging to afford the expenses. That’s where home renovation loans come in. Renovation Loans are a great way to finance a renovation without putting your home at risk.
What is a Renovation Loan?
A home renovation loan provides homeowners with the funds required to improve the look and functionality of their homes. They can come from mortgages with built-in fixer-upper funding or personal loans. Based on the kind of loan you receive, you may need to prove the money was spent on the house or paid to a contractor. However, most lenders are willing or able to work with borrowers with a poor credit history.
Are Renovation Loans and Home Improvement Loans the same thing?
No. Most “home improvement loans” are just a form of unsecured personal loans and aren’t appropriate for most renovation projects due to their high-interest rates, shorter terms, and limited loan size. On the other hand, renovation loans are the only loan that gives homeowners credit for a home’s future value, significantly increasing your borrowing power.
Advantages of Home Renovation Loans.
Renovation Loans offer several advantages over some traditional methods of financing:
- Avoid depleting your savings or maxing out your credit cards to pay for required repairs and desired upgrades.
- Combining your mortgage and remodeling loans will streamline your monthly bill paying and may lower your interest rate.
- Claim a more significant tax deduction by combining renovation and mortgage interest.
- Build equity quickly by boosting the value of your home.
- Add to your home’s value when you choose to sell.
