If you are planning to give your home a face-lift, consider a couple of things.
- First, do you know someone reliable who will do the repairs in record time?
- Second, have you searched for local contractors in the area and read reviews about them online?
- Third, what’s your budget?
- And fourth, how will your finance these repairs?
No matter how accurately you plan the cost of the repairs, the total expense might cross your set margin. Hence, financing them from your pocket is not a good idea. The good news is that there are several other options you can look into.
We do not recommend using your savings because you might find yourself empty-handed in an emergency. The average home renovation cost is $15,000. Following are a few more renovation figures:
- Complete Home Renovation: $200,000
- Remodeling a Bathroom: $38,000
- Adding a Room: $282,000
- Renovating a Kitchen: $135,000
- Installing a Deck: $19,596
- Remodeling the Garage: $15,000
Home Repair Loan Types
A personal loan is one of the most common options for financing home repairs. However, they come with a high-interest rate and have a shorter repayment period. Moreover, the loan is secured if you go above a certain lending amount.
The good thing about this loan is that you can use it in whatever way you please. You need a “Good” credit score to get favorable loan terms.
Home Equity Line of Credit (HELOC)
This is a secured loan that is backed by your house. The interest rate on this loan is lower than an unsecured loan. HELOC offers revolving credit that allows you to borrow an amount up to a set limit.
However, your home is put up as collateral, and a few missed payments can push your house into foreclosure. To use HELOC, you need to have equity in your home. You can borrow up to 80% of your home’s equity. The eligibility criteria for this loan are based on your loan-to-value ratio, which comprises your remaining mortgage value, credit score, and home value.
This loan option allows you to re-mortgage your house. Your current mortgage rate is recalculated, and you receive a new loan that you can use for home maintenance. You can borrow up to 80% of your home’s equity.
This is a popular home repair financing option. Since your mortgage is renewed, you will have a new repayment schedule. The interest rate will change based on the current market rate, lowering your monthly payments.
FHA Title-1 Loan
Last on our list of financing options is the FHA Title-1 loan. With this loan, you can borrow money specifically for house repairs. The maximum amount of loan you can borrow is $25,000, which requires collateral. The loan is unsecured below $7,500.
The repayment period for this loan is 20 years. The eligibility criteria for this loan is a DTI of 45%.
We have shared our list of home repair loan options. Even though not all these loan types require you to have a “Good” credit score, having one will lower the interest. A good credit score will allow you to make monthly payments easily.
Visit the Uptown Glass website to find out suitable financing options. The company offers a wide range of residential and commercial services, including glass repair, storefront glass installation, commercial glazing, etc. To get in touch with them, call (972) 537-8069.