Are you moving out of the small town and wondering how you can sell your Lilburn house in the fastest way possible? Perhaps, you might already be considering doing some fixes and remodeling to make it more attractive, and you’re wondering if getting a home renovation loan is worth it. As veterans in the real estate industry, we can tell you that while upgrading your home can make it more appealing to your buyers (and increase your home’s value), it isn’t the only way to sell it fast.
Before we tell you how you can sell your home in the fastest way possible, let’s first dive into your initial option and help you answer your question on whether getting a home renovation loan is worth it.
Pros and Cons of Home Improvement Loans
Home renovation loans are made available primarily to help homeowners improve the safety of their homes. People who can’t afford to fix their property enough to make it habitable can now do so and reap the benefits of having a livable home because of these financing opportunities.
ADVANTAGES OF HOME IMPROVEMENT LOANS
There are various advantages of home improvement loans. These include:
- Easy access to emergency funds in case any part of your home is suddenly damaged
- Improve your home and raise your property value without using your personal money (assuming you turn in a 100% ROI)
- Help lower insurance rates if you’re planning to get one after renovating
DISADVANTAGES OF HOME IMPROVEMENT LOANS
- If you get a secured loan and you default on payment, your lender may file for foreclosure on your home
- You may not be able to rent your home out until the loan is fully paid (although not all lenders have this kind of policy)
- It may require an official appraisal
The pros and cons of home improvement loans also depend on the type of loan you get. There are loans that require collateral, and there are other loans that don’t require any. Let’s learn more about these loans in the next section and see which ones would best suit you.
Most Popular Home Improvement Loans
With so many lenders in the country, it can be difficult to choose which one to apply for or even know where to start your selection. Before searching for specific lenders and their home improvement loan programs, it’s better to be familiar with the most common types of home improvement loans first.
Loans are provided or funded by either a government agency or a private company or organization. In general, government loans are known to have the lowest interest rates, but they are usually (not all) limited to a certain faction of society like homeowners living in government-accredited areas, low-income families, and such. On the other hand, private loans are popular for being released faster, but they usually have the highest interest rates.
Personal Loans are loans that can be used for any purpose — medical, random purchase, home improvements, etc. Some require collateral, while others don’t. With a personal loan, you can get the money you need quickly and pay within a fixed time period. A lot of personal loans, however, require a lump-sum payment. The longer it takes for you to pay, the higher your interest will be.
Home Equity Loans
Home Equity Loans are open to people who have built enough equity in their homes. This means that the home becomes collateral for the loan, and failure to pay your loan time gives your lender the right to foreclose on your home. The maximum loan value you can get depends on how much equity you have on your home.
Home Equity Line of Credit
This is more or less similar to a Home Equity Loan. However, instead of getting a lump sum, your approved loan amount is placed on a “credit card” which you can access anytime. Your credit limit will depend on how much equity you have on your home, and you can just use the money as needed. If your total renovation expense doesn’t reach the credit limit, then you only have to pay the amount you used up — not like lump-sum/cash loans.
0% APR Credit Cards
If you don’t have enough equity on your house yet and you don’t have any other collateral, you can also apply for a regular credit card. Credit cards are approved based on your income and credit history. The only challenge for credit cards and HELOCs is that you have to find a contractor who accepts credit cards.
FHA (203) Rehab Loan
The 203K loan involves the need to find a contractor and get renovation bids before the loan is released to you. This loan is popular among fixer-uppers wherein part of the loan is used for mortgage, and the rest is used to rehab the property. However, this can also be used solely for rehab purposes as long as the works fall under the eligible non-structural repairs of the 203K program (e.g., plumbing system, roof repairs, flooring, etc.)
VA Renovation Loan
This is similar to the FHA (203) Rehab Loan but is offered only to homeowners who qualify for the VA Loan. Like the FHA Loan, you need to find a licensed contractor and get them approved by the VA. Likewise, you can only use this loan for specific repairs — not for stripping down the whole house and rebuilding it.
USDA Single Family Housing Repair Loan
If you are living in a USDA Eligible Site, don’t qualify for any other loans, and earn income that doesn’t exceed the very-low-income limit of the county you are in, then you can try applying for this loan.
For more government loan options, you can additionally check out govloans.com.
After you’ve searched through all your home renovation loan options and you feel that getting a loan would just give you more burden, then stop looking for a loan and sell your Lilburn home as is! Spire Property Solutions will buy your Lilburn house as is without the need for you to repair or clean even a single thing!
You won’t have to worry about us because we are a duly registered home buying company, credible and open to help you in whatever property issue you have. So call us today at (678) 318 – 1801 or tell us about your situation through the form below, and we’ll get back to you as soon as we can. We are looking forward to hearing from you!