Your home is an important investment, but making renovations can be very expensive. In the past, whenever you needed to get money for your renovations, you would go to the bank and ask for a loan. Thankfully, there are many ways for you to get the money you need to make your home remodeling dreams a reality.
There are a lot of different loan options, lenders, and terms when deciding how to borrow your renovations. To navigate through this decision, consider the following:
- How much money will you need to renovate
- Narrowing down the different options and
- Focusing on the lenders who will be most willing to work with your needs.
To figure out how much money you’ll need, interview your contractor about how much money will be needed for supplies and labor. Make sure to add ten percent to the initial evaluation in case of surprises. If you decide to do the renovations yourself, take a detailed list of the supplies you will need, and put a cushion of at least thirty percent of that for anything that could go awry.
Several things determine the amount of money you can receive from the lender. Your credit score is an important part of getting a loan. The higher your score, the better the loan offer you will receive.
Your loan to value ratio, or LTV, will determine how much money you’ll receive for your loan. The LTV is typically eighty percent of the appraisal of your home.
Your income is another deciding factor in the amount of money you can receive for your loan. Just because you have a high income, your debt to income ratio is a huge factor in determining your loan.
Receiving a loan for your home renovations is the perfect way to keep your home in tip top shape and to get more back on your investment.