Financing
Lack of Financial literacy and available market opportunities, is what keeps most people from making their Dream Home a Reality.
That is why at House of Haro we also assist our customers with information and introductions to the top lenders in Texas, offering the best opportunities and market rates tailored to their individual needs.
There are many types of home renovation loans that are designed to help homeowners pay for the costs associated with making upgrades. Here are some of the top features of popular home renovation loan options:
Home Equity Loan
If you’re a current homeowner who wants to make improvements to your home, you may consider a home equity loan or second mortgage. With this one-time lump sum private loan, you lock in an interest rate and make set payments for the duration of the loan. The catch with this type of renovation loan? You’re putting your own home up as collateral. So, if you fail to make payments, your lender may end up owning your home.
(HELOC)
Home Equity Line of Credit
Similar to a home equity loan, with a home equity line of credit, or HELOC, you put your own home up for collateral. But, instead of disbursing your funds at one time, a HELOC allows you to borrow the amount you need when you need it. For home renovations, this can be good when large payments are due during your construction timeframe.
Cash-Out Refinance
If you are a long-time homeowner with built-in equity, you may consider refinancing your home. When you refinance, instead of taking out a second mortgage, you simply replace your original mortgage with a new one. You receive your home’s equity at closing to make any needed repairs or renovations. In exchange, you take on new payments, a new interest rate and a new payback period.
FHA 203K Loan
This federally-funded home renovation loan is designed for home buyers who decide to buy fixer-upper homes. This loan not only allows borrowers to mortgage the price of a home, but it also allows homebuyers to borrow additional money to make needed repairs to the home. Perks of obtaining this particular mortgage include a lower credit score requirement and lower down payment amount. If you think this option sounds like the home renovation loan you need, you can find available lenders through the U.S. Department of Housing and Urban Development.
Personal Loan
Though not always intended for home improvement purposes, you can take out a personal loan to complete your summer renovation plans. A big differentiator here is that your home is not held as collateral against your loan. The loan payback period is also typically much shorter with a personal loan. Finally, with this borrowing option, your credit plays a greater role in how much you are able to borrow.
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