Finance Your Major Renovation Project Through Here New Type Of Home Equity Loan
If you are a homeowner and planning to start a home renovation project, you must have access to substantial amounts of funds to complete the project. But the ways of raising loans on your house property are really limited.
Though you can go to the traditional ways of finding sources for funding your home remodeling project it is not easy to find an institution or a financial company that will be ready to bear the entire cost of your home or innovation.
If you are having an old house and want to make substantial modification and additions to make it a more livable one you need to find the right source of funding but the problem of finding the right source of funding will be compounded if you do not have enough equity to cover the home renovation project cost.
But you need not worry now as we have many new types of loans that can be arranged for running the home remodeling project. For instance, you can approach companies like Reno Fi a technology company that is offering innovative and revolutionary types of home financing loan credits. This company is engaged in connecting the homeowners like you with credit unions who are willing to grant a loan based on how much the house will be worth after remodeling and Renovations are completed.
This is the best way to finance your home remodeling project as you can get full renovation loans based on the appraised value of the home after the completion of the renovation project. Under this new type of new home equity loan scheme, the homeowner gets home renovation loans with repayment periods of up to 20 years at a fixed rate of interest.
This type of loan is available even if the house you are trying to renovate is an old one and needs substantial amounts of money to complete the renovations to add more value to it.
In the present times, the covid-19 pandemic has substantially increased the number of Home Improvement projects and it is a real boost to the home improvement and home renovation industry. The National Association of Home Builders has found that the remodeling index of home and renovation and construction has raised to new heights during the period of a pandemic.
The home improvement retailers and remodeling contractors are also reporting a big spike in their business. This is probably because most of the American are working from their home office and many homeowners are in the mood to upgrade their spaces to make way for the need of additional space and additional living areas.
Moreover, the bike in home prices has also put an artificial demand on the available homes for sale, and this shortage of homes available for sale has also limited the choices available to the homeowners. Otherwise, they would have moved on to new homes, but now they are forced to stay in their existing homes and they are taking home renovation and additions to their homes.
As a consequence of the above situation, the National Median price of homes sold during the period December 2019 to December 2020 is found to have increased by up to 12.9%. During this period, the housing inventory also dipped to a record low as stated by the National Association of Realtors. Due to this also it became natural for the homeowners to go for home additions and renovations to meet the demand for additional living space as all the family members are forced to stay inside the house the whole day for indefinite periods.
But for the homeowners who are seriously thinking of going for home renovation and home improvements it is becoming a real challenge to raise enough funds to run the home improvement project. The traditional home equity line of credit is now good only for homeowners who have significant equity in their properties.
For example, if you are a homeowner who is owing $300000 on your $400,000 home property the bank normally refuses to lend $100,000 through the home equity line of credit and allows only $20,000 as a credit to keep within the loan to equity level of 80%. This amount is not sufficient to fund the proposed home renovation project and hence unless the homeowners have alternative sources to fund their home renovation projects they cannot do their projects shortly.
The Renofin way of financing helps the homeowners access to the necessary funds for the home renovation project under this new equity loan approach. The homeowner is allowed to borrow up to 90% of their home’s after-renovation value. Reno Fi is working with many credit unions throughout the country and together they offer loans especially for home renovation projects based on the after renovation value for the home.
This type of equity loan scheme has been launched to help the homeowners who are unable to play for renovations without help from this new way of raising funds for home remodeling projects. This type of funding fills the gap in the home credit union market and helps the homeowners to complete the home renovation projects to add value to their old homes.
This new type of home equity loans are raised as second mortgages on the already existing and are granted as long-term loans with a fixed rate of interest of 4.25%. Though this interest rate is higher than the interest rate on the primary mortgage a higher rate of interest is applicable due to the flexibility of allowing the homeowners to borrow against a to be created value in their home property.
Under this credit scheme, the homeowners pay for an appraisal to establish the home's real value after the completion of the renovation. This operation takes into account the type of renovation proposed and the amount of value that will be added to the house properties market value once the renovation is completed. This new type of home equity loan allows the homeowners a generous $150,000 home renovation project loan at a 4.25% rate and when the loan term is fixed at 20 years the homeowner is committed to paying a sum of $929 only per month.
This type of loan is also very helpful to those homeowners who have taken advantage of a low rate on their primary mortgage and refinanced their homes by closing their existing mortgages by paying closing charges. To get this type of new equity home loan the borrower has to pay for an after-renovation appraisal that involves payment of $100 to $200 over our standard appraisal fee along with a closing fee of 95 to 500 Dollars.
This type of home equity loan based on the after the renovation appraisal value of the home is a boon to the homeowners who are unable to fund their renovation Projects through the traditional way of raising home loans based on their current Home Property value.