Funding a Home Renovation Project | Victorville Murphy Construction Contractor

Almost every homeowner has a wish list of repair and remodeling ideas for making their house a better fit for their lifestyle. While it is easy to imagine home improvements, it is harder to figure out how to pay for them and make them a reality. Here are a few ideas for coming up with funding for residential improvements in Victorville and the High Desert area.

Financing a High Desert Remodel

The best way of financing any project is with cash. While many people do not have cash to pay for a large renovation project, it is often possible to break a remodeling project into smaller projects which may be more financially feasible with cash. Saving up on a plan is another way of accumulating the cash needed for remodeling or repairs.

Home equity credit lines are another option if you have a mortgage and good credit rating. Equity lines of credit allow the homeowner to withdraw money as they need it and repay with a monthly minimum payment plus as much more as they want to pay off each month.

Refinancing a first mortgage is a popular way of getting funding for home improvements, especially for those who are shopping for a better deal on home financing anyway. Mortgage refinancing is not always the best idea, however, if the improvement has a lifespan shorter than the mortgage.

Home equity loans provide a fixed sum and a fixed repayment schedule. Terms range from 5 to 30 years, but 15 years is most common. The borrower must have sufficient equity in the property to qualify.

Lending for Construction Contracts

Some banks and other lending institutions offer construction loans for new construction and improvements to existing structures, but these can be hard to find and usually have many requirement and ample paperwork. Funding is released as work is completed in stages.

Reverse mortgages allow people over 62 years old to receive a one-time payment of approximately half the value of their home, which they can then use for renovations or anything else. The home is then transferred to the lender when the person dies or moves out.

The federal government offers HUD FHA Title 1 Loans of up to $25,000 for home renovations. These loans are managed through regional lenders and offered at current market interest rates. Applicants must have a good credit history and ability to make monthly repayments but do not need to have substantial equity to qualify.