A renovation refinance loan is a loan that allows you to refinance a home in need of improvements.
Are you looking for a way to fund your home renovations? If yes, then a renovation refinance loan can be an excellent option for you.
What is a renovation refinance loan? And why should you consider it? A renovation refinance loan is a loan that allows you to refinance a home in need of improvements. And instead of paying back separately, the improvement costs are rolled into a new mortgage loan.
Here are three reasons you should consider taking a renovation refinance loan.
1. You’ll Be Able to Take Advantage of Low-Interest Rate
If the current mortgage rates are lower than when you initially financed your home, taking a renovation refinance loan can lower your monthly payments and interest rate.
2. Remodeling Is Better than Buying a New Home
Prices in most markets have been skyrocketing, and the housing market is no exception. With people scrambling for the available houses, the ensuing bidding wars have led to increased home prices. With the current high prices, remodeling might be cheaper than moving to an entirely new home.
3. Remodeling Will Raise Your Home’s Value
If you consider selling your home, you’ll want to make it look more appealing to potential buyers. Revamping your flooring or replacing your roof will not only give your home a new look but also raise its price tag. You could also borrow against your home value after the remodeling.
Considerations to Review Before Applying
- Research the right product – Renovation refinance products vary from one lender to another. And each product has its unique terms and conditions. Pick a renovation finance product that suits your needs and one that has low monthly payments.
- Familiarize yourself with refinancing requirements – Get to know what the lenders require. Standard requirements include employment records, debt to income ratio, or credit rating.
- Get a competent contractor – Estimating home improvement costs is no easy feat. For accurate estimation, engage a certified home developer who can give your renovation a detailed budget to determine how much you need to borrow.
- Compare different lenders – Don’t rush to take your renovation refinance loan with the first lender that comes your way. Instead, get out there, meet with several lenders, compare their offers and pick the best. Also, when choosing a lender, make sure the lender has a good reputation. You can visit online review sites to find out what previous clients are saying about the lender. If the reviews are positive, then you can go ahead and work with the lender. On the other hand, find another lender right away if the negative reviews outweigh the positive ones! Also, be careful not to choose a lender who has hidden fees and unfriendly terms.
Get in Touch With the Better Rate Mortgage team
Are you in St Louis and looking for the best renovation refinance loan lender? Contact the team at Better Rate Mortgage today so we can get started on your renovation loan application as soon as possible.