Adding renovations to your Stephenville, Texas home can be a great way to not only enjoy living in it more, but also to increase its value when it comes time to sell. The question is, How are you going to pay for these renovations? Take these things into consideration and consult a qualified real estate professional to find what’s best for you.
The first way to finance home improvement projects is a construction loan. Construction loans, since they will be viewed as subsequent to your mortgage, tend to have higher interest rates than other loans, according to real estate website Right At Home Daily. Instead of using your equity, a construction loan takes into account the projected value of your home once renovations have been completed.
Another way to fund your renovations is through an equity loan. If you own a large percentage of your Stephenville home, home improvement projects are a great way to use the equity you have accumulated. However, if you’re adding some major improvements to your home, be cost conscious. If your renovation costs are going to surpass the value of the home (it’s not as rare as you’d think) and you don’t have much equity in the home, this probably isn’t going to be your best bet, as lenders aren’t going to be inclined to give you a good deal when you’re starting out in the red.
With the low mortgage rates and rising home values in the current market, some lenders are offering a loan in which you refinance and simultaneously borrow enough to complete renovations on your home. Lenders Fannie Mae and Freddie Mac have such programs, and home buyers are taking advantage. Getting locked in at a low rate while borrowing for home improvement seems to be more favorable for most people than getting a construction loan or equity loan.
For a helping hand on financing home improvement projects, or any Stephenville, Texas real estate concerns, get in touch with us. We are experts who’ve helped homeowners, home buyers and home sellers get the most out of their Stephenville real estate-related ventures.