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How to Get a Home Renovation Loan

How to Get a Home Renovation Loan

Renovating your home is a fantastic opportunity to be creative in how you want to improve your home. However, the process can seem expensive and even somewhat scary. In order to tackle the high costs of home renovation and help you avoid the pains that come with refinancing your home, there are several home renovations loans available that can help you pay for the renewal of your property.

Home renovation loans are not always very well-known, but they are a fantastic way for a homeowner to take advantage of a new financial option for updating their home. Many different companies have multiple options for home renovation loans, so that you can find and apply for a loan that is fiscally responsible for you and can give you the proper funds for updating your home. In this guide, we will go over what exactly a home renovation loan is, how to get one, and how to find the best renovation loan for your needs.

What is a home renovation loan?

Home renovation loans, or home improvement loans, encompass a variety of different kinds of loans that give a homeowner access to the funds that they need to make renovations to their home. Often, institutions offer both secured and unsecured loans to help a homeowner afford the updates they may need or want to make to their home.

Renovating your home can often increase the property value of your house, but not all improvements may be worth the money to update. It is important to plan out ahead of time the renovations you wish to make and to research how it will affect your home’s market value, as well as how the value may fluctuate in the future housing market.

The different kinds of home renovation loans

Depending on your home’s needs there are a variety of options for home renovation loans. There are loan options that are better suited for single room updates, multiple rooms, or even entire home renovations. The main categories for home renovation loan options come down to home equity loans, home equity lines of credit, personal loans, cash-out refinancing, and FHA 203(k) rehab loans.

Personal loans are offered by most companies and can be much simpler to apply for. You’ll often be able to receive the funds you need quickly to make the proper changes to your home. However, these options often differ with each company with which you go, so it is important to ask about options before applying for a home renovation loan.

What are the benefits of a home renovation loan?

Home renovation loans make renovating your home much easier and simpler. Paying for the renovation of your home out of pocket, even on a smaller scale, can prove to be a big or burdensome expense. Home renovation loans are designed to help you be able to pay for brand-new renovations for your home that will boost the property’s value.

It is important to familiarize yourself with all your home renovation loan options through a variety of loan companies. Homeowners sometimes use cash-out equities or home equity loan options for home renovation, but there are also options available for an owner to borrow against the future value of the house. These options can drastically decrease the amount you will need to borrow but can trap you in raised loan rates. Some issues can arise with cash-out equities and home equity loans, if you only recently bought your house and do not yet have a lot of equity on which to fall back.

When should I consider a home renovation loan?

Firstly, you should only consider applying for a home renovation loan if the renovation you are planning to make is going to increase the value of your home. Failing to consider this is a recipe for disaster. Thankfully, many types of home renovations can increase the value of your home. If a repair to your home will be worth it overall, a home renovation loan may be necessary. You may also want to consider home renovation loans if you need to make a drastic change to your home that concerns the safety of the people living there.

Before you apply for a loan

Before applying for a home renovation loan, be sure to familiarize yourself with the status of your home, including your home’s current equity. Secondly, there is a much smaller risk of losing your money in a loan when you have less money invested in your property. Be sure to be as intentional as possible with your renovations. Resist the temptation to make unnecessary additions just because you can.

Additionally, look for ways to save money. The more you save on the renovation, the less you will have to pay back when it comes time to pay off your loans. Be sure that you research multiple companies and the loan options they offer, so that you can get the best deal possible for your home renovation loan and make sure that you get the funds you need to make the proper renovations to your home.

How do home renovation loans work?

How a home renovation loan works depends primarily on the type of financing for which you apply. Many different companies offer loans that are specifically tailored for home renovation and can help you find the right amount and rate for the loan that you need to make your planned home renovations. Many companies offer personal loans that can be paid off over a long period of time, with varying rates. It is important to make sure that you are familiar with how your specific home renovation loan works and your loan’s policies in order to avoid hurting your credit or additional fees.

Finding the right loan for me

It can be difficult to find a loan from a proper lender. There are a variety of different options from which to choose, and there may be just one that will benefit your home project better than the others, as every home and every renovation need is different. It is best to become familiar with a wide range of companies that offer different options for home renovation loans as well as with the other services they may offer. The following is a list of some of the highest-ranking loan companies with home renovation loans available on the market right now:

  • RenoFi
    The secret of a RenoFi home renovation loan lies primarily in the ability for the homeowner to borrow against the future value of their home, after it has been renovated. A home renovation loan can let the homeowner borrow up to eleven times more than a traditional home equity loan, so being able to do this can drastically increase the amount that you can receive from a home renovation loan and can make it much easier to complete the proper renovations for your home and ensure that it reaches the value that you planned. Take the next step in your renovation project by seeing if you are eligible for a RenoFi home renovation loan.
  • Lightstream
    A solid choice for an unsecured personal loan that can help you make the home renovations you need. They offer great rates and competitive pricing that can help you get the absolute best deal available on the market.
  • SoFi
    Another safe choice that offers loans up to $100,000 for home renovation. They also offer many membership rewards, including unemployment aid.
  • Marcus by Goldman Sachs
    Marcus offers loans with no origination fees, late fees, or prepayment fees. The rates start a little higher than the other companies on the list, but it can be worth it overall when you do not have to worry over extra, hidden fees.
  • Prosper
    This is perhaps the best option for small home renovation loans and there is a minimum of $2,000 for home renovation loans. However, the rates can vary by loan, and you may find yourself waiting for your funds to come in, as they are rarely quick.
  • Avant
    A great option if your credit does not allow you to receive a loan from other companies, Avant offers a wide variety of home renovation loans to suit your needs even if your credit is not high. However, administration fees and APR can be higher than at other competing companies.

Home renovation loans are not widely known or utilized, but there are many companies that offer funds for home renovation projects. Some offer unsecured personal loans, while others can offer you more specific loans to ensure that you have the proper funds for home renovation. Loans can be a difficult or scary concept to tackle, but they can quickly become necessary when the time comes to make changes to your home that would otherwise cost an arm and a leg. You may even find that loans are simple to understand once you do a little research. Depending on your needs, there are companies available that can offer you loans so that you can renovate your home and make it safer, more valuable, or just more modern.

Ready to start your renovation? Contact Able Roof

Once you’re ready to start your renovation project, make sure you select a reputable company, like Able Roof, to do the work. Contact us today to schedule a free estimate for your home renovation project.