Home renovation loans
Home renovation loan is a type of loan that is provided by various types of housing finance and home loan companies for carrying out renovation and repairs of a residential property. Renovation activities that are eligible for getting loan include plumbing, painting, re-structuring etc. Home renovation loans are not provided for furniture works . All the activities that are covered under civil work are eligible for getting home renovation loan. Home renovation loan is generally provided against the mortgage of residential property .
For applying and getting home renovation loan, a person is required to obtain quotation regarding renovation work from a qualified civil contractor or engineer. Some home loan institutions also accept quotations provided by qualified architects.
In United States, a person can approach Wells Fargo Home Mortgage for getting necessary home renovation loan. It provides loans for all types of renovation needs, whether small or large. Home renovation loans are provided by Wells Fargo to individuals living in United States that have found a home to live but needs little work . Similarly, all homeowners that want to remodel their home and have little equity available can easily apply for home renovation loan. If a person wishes to carry out renovations for purpose of investment rental property value increase, he can contact Wells Fargo. Home renovation loans are provided by Wells Fargo under Purchase and Renovate program and Refinance and Renovate program.
Under Purchase and Renovate program, loan is provided for purchasing home as well as for carrying out renovations. This enables borrower to get more money and in increasing the value of home . Since renovation costs are spread throughout the entire loan term, monthly payments attached with home loan are lower. In some cases, the interest paid by the borrower on cost of improvement made is tax deductible . Loan for renovation is provided immediately under Purchase and Renovate program . This type of home renovation loan is applied by means of a simple one page application. There is one set of closing costs and fees that is applied to the loan amount . Maximum amount of renovation loan that can be obtained depends upon the Âafter improvement value of home.
Refinance and Renovate is another home renovation loan program provided by Wells Fargo . In this type of loan, a person can easily refinance the mortgage loan and can get the extra amount needed for carrying out renovations . Thus, all the requirements of person regarding lower interest rate and extra amount for renovation are fulfilled in one transaction only. In most of cases, the interest rate is lower than combined interest rate of mortgage loan and home renovation loan . The maximum amount of loan depends upon the increased value of home after improvements . Renovation in the home can be started just after closing of loan under the refinance and renovate program . Like Purchase and Renovate loan program, Refinance and Renovate loan program also involves one monthly payment and one set of closing costs and fees .
Before applying for home renovation loan, a person should ensure that all the papers relating to residential property are in order. There are some lending institutions that may require a person to provide 15-20% of renovation cost as margin money.
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