Even though home renovations can be very beneficial in the long run, many owners have a difficult time funding these projects. While you will most likely need to pay for at least some of the expenses on your own, you might want to consider applying for a home renovation loan through a lending company. Check out our top tips to consider when applying for a home renovation loan below:
Renovations With High Returns
You might be carrying out a renovation project to make your family more comfortable or your home more efficient, but you still need to consider the return on the investment. Getting approved for a home renovation loan is much easier if the project will increase the value of your property by a good amount. Options such as giving your kitchen a facelift, installing high-efficiency appliances, and switching over to drought-tolerant landscaping are generally seen as the most economical upgrades.
Establish A Flexible Draw Period
Anyone who plans on building a home or carrying out major renovations on their current home should work with a lending company that offers flexible draw schedules. Your draw schedule determines how many weeks or months you can actually withdraw cash from the loan, and it must be flexible enough to help you overcome any hiccups you might experience. If you work with a company that only offers a short draw schedule, then you might find yourself struggling with new loan payments before your first project is finished.
Finding The Best Contractors
Going with a second-rate contractor can be an extremely expensive mistake that ends up costing you much more than the loan itself. Shoddy work that doesn’t adhere to residential regulations could end up costing you thousands in additional fines and fees. After you have paid all of those additional expenses, you will then need to go back and have the work fixed. Your renovation projects should only be carried out by experienced and reputable contractors who are fully bonded and insured.
Take Control Of Your Current Debt
Just like when you applied for your first mortgage, your lender is going to take a very close look at your credit score before signing off on a home renovation loan. Homeowners who have missed a few payments or recently changed jobs might not be eligible for lower rates. If you have any issues with your credit score, then you might need to consider other options such as refinancing your current home loan and using the extra money you save each month on the renovations.
Before you consider any major projects, you also need to think about your long-term plans for your home. Anyone who plans on selling their property in the coming months might want to avoid more personalized upgrades such as having a raised garden installed or painting unique patterns on the walls.
Guest Author Bio: Emma Sturgis is a freelance writer based out of Boston. She recommends Assurance Financial Group for your lending company.