Home Improvement Solution

Posts Tagged ‘Home Buyers’

Homes need updating. Aside from the cosmetics of tiles and paint colors, there are the basic, but necessary renovations that need to be taken care of as well.

Young home buyers frequently enter into a mortgage commitment scraping together all they have to offer a decent down payment and having calculated what they need to be able to afford the monthly payments. What they may not take into as serious account are the monthly utility bills and the eventual (inevitable) costs of house and property upkeep.

Those requirements may be acknowledged as necessary somewhere down the road, but since they are not immanent, the couple may simply assume they will come up with the money from somewhere when the needs are more pressing.

However, from re-shingling a roof to weather-proofing your windows, major home improvement projects are a part of home ownership. Unfortunately, they’re also costly and there isn’t always room in the family budget for a full overhaul of the heating and ventilation system. That’s where home improvement financing comes in.

For those who don’t have much extra money saved, home improvement financing allows homeowners to borrow what they need for renovations. Sometimes the house itself is used as equity and in other situations, little to no equity is required. Keep reading to learn about the different types of home improvement project financing.

Home Equity Loan

The terms for any loan, including a home improvement or renovation financing loan, will vary depending on the borrower. If you have good credit, your mortgage is paid off and you’re willing to put your house forward as equity, then you can expect to get great rates payable over a period of months or years.

You could even opt for a second mortgage, which will get you rates close to prime. However, while a home equity loan obtains for you a lump sum up front, remember that you’ll start paying interest on that entire sum right away.

Line of Credit

One of the easiest ways to borrow money is through a home equity line of credit. A line of credit allows you to only borrow as you need, therefore only paying interest on what you use. The rates, if your credit is good, are great and they’re often approved fairly quickly and painlessly.

Remodeling or Home Improvement Loan

Many banks offer remodeling or renovation-specific loan programs. These work by combining a construction loan with a mortgage and are based on the projected value of the home after you complete your project.

You will most likely have to submit a building plan as well as a breakdown of all your project expenses. The bank then usually releases the money in increments, as the project progresses.

Credit Cards

If your credit isn’t as good or you’re still building it, you may opt for a small amount of financing that will let you complete the project without being overwhelmed by debt. An example of this might even be store credit from a local store – just enough to purchase a new furnace or the materials you need to retile your floors.

If your home has been on the market for a while then you know how rough today’s housing market is. Home prices are dropping, there are many more houses for sale and everyone is in competition for the same number of potential home buyers. The key to increasing your home’s value and then selling your house quickly is to set it apart from other homes in the area. You need to give your home more features and make it more appealing than the other homes in your neighborhood.

These sort of home improvements are not necessarily cheap, but by spending a little money to fix up your house you could end up making a lot of money in a potential home sale. If you’re going to do these home improvements in order to sell your home then you should strongly consider hiring professionals and not doing them yourself. Professional contractors will do the work quicker and will more than likely do a better job than you could yourself. That extra step between professional and amateur home improvement will show when you put your house on the market.

Here are the top five home improvement projects to consider:

Professional Landscaping and Updated Exterior: With the increased number of homes on the market buyers are able to be more choosy and many are initially judging homes with a simple “drive by” look. If your home doesn’t have that curb appeal then it’s time to spend some money having the front yard professionally landscaped and maybe updating the exterior siding, windows and doors. Make sure your home can be seen from the road and looks freshly updated. A first impression can make all the difference between selling your home and having it on the market for months or years at a time.

Updated Bathrooms: The last twenty years have brought a lot of modern designs and updates to the bathroom and buyers are looking for that. Don’t go overboard but new cabinets, flooring, sinks and showers are almost a must. Whirlpool tubs and electric towel dryers are almost becoming standard bathroom equipment in many newer homes, so you may want to consider doing the same to your bathrooms.

Kitchen Remodel: Kitchens are tricky because you can very easily spend a lot of money updating a kitchen only to to have the kitchen not meet someone else’s taste. Try to stick with neutral and light colors in the kitchen. Modern appliances that stay with the home will always garner more interest and consider spending the extra money on stainless steel appliances which are still very popular.

Updated Flooring: Floors are often overlooked in home remodelling but there are a lot of new affordable and durable flooring options that can change the look and feel of a room as much as a fresh coat of paint. Consider replacing any vinyl flooring with tile or some sort of laminate replacement floor and definitely clean or replace any worn or dated carpeting.

Additional Rooms: Putting an addition on a home is always a great way to increase buyer interest and your home’s value because more space warrants a higher price most of the time. If your home is just like all the other homes for sale in your neighborhood but your home has an extra bedroom or entertainment area then your home will obviously be more appealing.

The one thing to remember is that you should not go overboard and improve your home right out of your price range. Only consider improving your home with about 10% of your home’s selling price. So if your home is worth about $200,000 then you might want to consider spending no more than $20,000 on home improvements. If you spend more than that then you may not be able to recoup your expenditure when you sell your home.

How do can you pay for all these home improvements? Many people are turning to home improvement loans to pay for these sort of projects in order to sell their homes. Banks, mortgage companies, lending companies and even large hardware stores all offer various home improvement loan and financing options to consider. These types of loans are becoming popular and competitive as more and more people realize that they need to improve their home in order to sell their home.

Many people are trying to sell their house right now and they’re finding that the market still favors home buyers over home sellers. In order to make your home more attractive to a potential buyer you may need to consider some small upgrades or home improvements to set it apart from the competition. Home improvements can not only help you sell your home but depending upon the upgrades you choose to perform they may actually help you get a higher selling price for your home.

In order to improve your home the way you should you’re going to need to set some money aside to really get the job done the right way. You could save some money on your home improvement projects by perfoming them yourself, but if you’re in a hurry to sell your home then you may want to consider hiring a professional.

There are several ways you can borrow the money needed for quick home improvements, but some methods of financing a big home improvement project are much easier than others. Here are some of the more common ways of paying for large home upgrades in order from easiest to most difficult to attain.

The easiest way to actually pay for a large home improvement project is to have the money on hand already. Not a lot of people have thousands of dollars hanging around but many people do have items they can sell to raise some money. You could sell old tools, a boat, a car or simply go through your basement and sell items online all to raise the money you need to pay for a home improvement project. Depending upon what you have to sell this could either be the easiest or most difficult way to finance a home improvement project.

Home improvement store credit cards are another way to pay for smaller home improvement projects, usually totally ten thousand dollars or less. Getting a credit card from a hardware store is usually not very difficult even if you have questionable credit. The problem with cards like this is that they can sometimes have high interest rates and high fees if you aren’t careful. To get a home improvement store credit card you usually just have to fill out a single form from the store.

You can also use the equity in your home to get a home improvement loan. You could take out a home equity line of credit, a home equity loan or even a second mortgage based on your needs. These types of financing are more difficult than a credit card to obtain and they’re dependent upon you having enough equity in your home to qualify for them. Most of these types of loans carry an initial fee of a couple hundred to several thousand dollars and there are usually closing costs and inspections to go through as well.

The most difficult type of loan to get for a home improvement project is probably a loan directly from a bank without putting anything up for collateral. To get a loan like this you’ll probably want to present the bank with detailed improvement plans, quotes from one or several contractors and proof of steady income. Different banks offer different types of home improvement loans and some may be more willing to work with you than others.

Generally, it is easier to pay for home improvement projects by selling things or having the cash on hand than it is to apply for any sort of home improvement loan. Home improvement credit cards are easy to obtain and good for small projects, home equity loans are good for larger projects if you have the equity in your home and straight bank loans are usually the most difficult loans to obtain for home improvement purposes.