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Financing Options for Remodeling

February 9th, 2011 Posted in About The Remodeling Process

There are several home improvement financing options available to consumers.   Among the most popular is the home equity loan.  If you have a fair amount of equity in your home this can be a good choice.

Some institutions will allow you to borrow against the anticipated equity in your home once your remodeling project is complete. If you are planning a fairly large project or do not have a lot of equity in your home this will give you more flexibility and allow you to include all the things you’re hoping to.

When deciding how much to borrow, you’ll want to consider how long you plan to stay in the house and how much return you’ll get on your investment when you sell.  The amount you want to borrow will impact the scope of the project you decide to undertake.  Return on investment depends on the house, neighborhood, type and quality of the improvements.  Some improvements bring a higher return than others such as kitchens, bathrooms and family room additions. Naturally the longer you stay in your home the more you’ll recoup when you sell.

Once you’ve decided how much you’re comfortable with borrowing check with a bank to see if you will be approved for that amount based on the equity you have in your home, the appraised value of the home (with or without the improvements), and your income.  Research various sources of funding to compare individual qualification guidelines, interest rates, terms and tax considerations. A professional remodeling contractor is familiar with financing options available and can help.

At Powell Construction we can guide you toward a bank or credit union that offers the type of financing that you’re looking for. If it’s a construction loan that suits you best we are a preferred builder for the area financial institutions and can prepare the proper documentation that is required along the way.

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