Do you need, or want, to renovate, but don’t have the necessary funds? A house renovation loan can be your golden ticket. You are thinking about it, but don’t know enough information? You want to find out everything you need to know about renovation loan application, existent type of loans, and how do these work? You’re in the right place, because this article will answer to those exact question.
What Is a ‘House Renovation Loan’?
A house renovation loan is your opportunity to renovate (repair or improve) your home. Or, maybe you find the perfect house, and you want to buy it, but the renovation needed is not within your budget. If you need to fix the plumbing, have to do some bathroom remodeling, or repaint the whole house, a house renovation loan can help with any and all of those problems, and many more. Living in a place that you don’t like, or you feel like it doesn’t represent you, can stress you more than you can ever imagine. The place you live in can make you either happy or unhappy. And, being unhappy is not good for you, for those close to you, your career, and anyone around you. It’s very important to feel safe and cozy in the place you live in.
So, let’s say that you just decided that you want to apply for a renovation loan. You might want to know what type of renovation loans are out there, and which one is best in your situation. These are some of the most popular loans:
- Home equity loan – Your collateral is your home, and you can borrow based on your home’s equity.
- Home equity line of credit – The credit line is based on your home’s equity. This loan works like a credit card.
- Personal loan – There is no collateral required for this loan. And, it has a short repayment period.
- Cash-out refinancing – Basically, lower your mortgage, take the cash out, and use it for renovation.
- Construction loan – It offers funds for construction, or serious structural repairs.
Now that you know the existing types of house renovation loans, you can decide which one is most fitted for the situation you are in. Remember to ask your lender specifically about the collateral needed and interest rate before choosing.
Do You Need a House Renovation Loan?
Sooner or later, you’ll need to do some repairing around the house. Or, if you just bought it, it most probably needs some repairing. And, unfortunately, renovations almost never go as planned; because something new always comes up during the process. As an example, you just want to change the tiles in the bathroom, but the workers hit a pipe; or you’re changing the floor in the kitchen, and realize that you also need to paint the walls. In that moment, you’ll be happy that you have a safety net.
Remodeling and upgrading your home is a costly, and mentally draining process. A loan would offer some peace of mind. A house renovation loan offer you this safety and stability. Remember that your house’s integrity is important, and everything should be safe and sound for you and your family. Some things look like they can be postponed, but it’s better the fix the problem as it’s just starting. Also, maintaining the house in its best shape will increase its value over time.
Renovation Loan Application Process
The renovation loan application process sounds scarier than it actually is. In the next section, you’re going to see the whole process divided into steps, so it’s easier to understand.
The first step is to determine what you actually need to do, and how much it’s going to cost. Have an exact renovation plan, and talk to some contractors, so you have an idea about the estimate cost of the whole project. And as we’re talking about the cost, we can go to the next step. The second step is to make sure that everything is alright with your credit score, and with the repayment plan. It’s important to have an exact plan when it comes to repaying the loan.
The third step is to research and compare the money lenders available. It’s best to choose certified money lenders, that have a reputation of offering what they say they offer. After you choose your lender, gather your documents, and apply! The renovation loan application process should only be filling out an application form, and attaching the documents. But, what are the necessary documents?
- Identity proof
- Proof of income
- Proof of residency
- Employment contract
I’m sure that the renovation loan application process is now easy to understand for you!
The required documents will slightly differ depending on the lender. And while the answer time will also differ, it generally takes anywhere from a few days, to a few weeks. Again, make sure your credit score is good, because a higher credit score means a lower interest rate.
How to Choose The Right Money Lender?
Choosing a certified lender is one of the most important steps. This will ensure safety throughout the whole process of lending and repaying. It’s always safer to carry all your endeavors in a legal manner, because the contract you sign with them, will have a significance in front of the law if something happens.
Look for a lender that offers flexibility and transparency. And remember to ask all the questions you have, so the process goes as smoothly as possible. Choose a company that is open to communicate clearly before signing the loan, and during the whole period of the loan.
Conclusion
Now that you are familiar with the renovation loan application process, everything depends on you. Look for a licensed contractor, gather your documents, and choose your lender. Make the space you have, be the home you always dreamed of. Renovate and improve your home with the help of a house renovation loan!