Home Remodelling Loan And Checklist Before Picking A Home Remodelling Loan.
On one weekend, a Saturday in particular, I decided to attend a
seminar on home remodelling. I Usually prefer to call it home
renovation. It was basically for the elderly people.
Am not in the elderly bracket but I decided to attend anyway
because I was feeling a bit lonely and wanted to be occupied.
On looking around the room, I saw that most people were in my
age group.
Think it is because they have to meet most of the cost for
refinancing the renovation of the home of their old ones.
This seminar turned out to be good to me and at the end I was
convinced it was a good take.
In this seminar, it was revealed that research so far shows
this:
It will probably cost anywhere from $100,000 to $150,000 to do
a good renovation of a house for the elderly. This seems a
staggering amount, until you consider that it would cost them
from $3,000 to $5,000 per month if they were to rent a unit in
a retirement facility in a location where they might not be as
happy. Looking at it from that point of view, in four years or
less, they would have spent the money anyway, and at least
making home improvements allows them to continue to live in the
same location and keep their asset.
The biggest challenge many older adults face when renovating
their homes is how to pay for them. Many are on fixed incomes
with few resources. Their property may have increased in value,
but they are cash-poor.
During this seminar, a flyer was distributed that provided a
telephone number for the city and county Elderly Affairs
Division Rehabilitation Loan Program. Many cities have similar
funds available as a means to assist individuals to stay in
their own homes, rather than move to more costly facilities.
I learnt that the loan program was available to a person or
family requiring home modifications, based on a health or
safety need. The home loan program required that an application
be submitted with information about the number of persons living
in the household and their combined annual income. This
information was then used to determine the interest rate for
the loan. For example, for combined incomes of less than
$41,000 or so, the interest rate was 2 percent; for less than
$52,000, 4 percent; and so on.
Another thing I learnt is that you can also have an option,
which is that of a reverse mortgage. A reverse mortgage is a
special type of home loan that lets a homeowner convert a
portion of the equity in his or her own home into cash. The
equity built up over years of home mortgage payments can be
paid to the owner, but unlike traditional home equity loans or
second mortgages, no repayment is required until the borrower
no longer uses the home as the principal residence.
Reverse mortgages are available through different lenders, as
well as HUD. There are some property restrictions, but
single-family homes, two-to-four-unit properties, condominium
units, townhouses, and some manufactured homes are eligible.
Generally, the greater the value of the home, the older the
owners, the lower the interest rates, and the more one can
borrow. This is good news right now, with interest rates so
low, and it is an opportunity for your patients who have a
higher annual income that disqualifies them from other
programs. And if they live in an area of the country where land
or home values are traditionally higher, such as Hawaii or New
York, it may be the best option available for refinancing.
Given the sheer amount you have to invest or borrow, here is a
checklist before you decide on any renovation project.
Consider the following before you decide how to finance your
home improvement project:
-Talk to lenders about your options.
- Know that lenders are concerned about income, debts, credit
history and property value.
-Consider a secured loan when you want to borrow more money,
get a lower interest rate or reduce taxes.
-Refinance an existing loan if you have enough equity and if
the rates are two points lower now than when you initially
borrowed the money.
-Use a home equity line of credit that is secured by your home
so youre your interest is tax deductible.
-Take out a home equity loan to get fixed rates and payments.
-Consider a homeowner loan that is secured by your property.
Use a value added loan when the improvement you make will have
a substantial impact on the market value of your home.
-Do your research before using contractor financing.
Good Luck
Get more information on home loans and home remodelling by
Lubowa.M.Planet. Visit Home Loans and mortagewebsite.
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