3 Ways to Finance Your Home Renovation
Home improvement isn’t just a successful TV show from the 90s. It’s also a great option for those who love their homes but want to make some upgrades! Making renovations to a few key features in your current home can make it feel brand new without the hassle of a full move. But once you’ve made the decision to renovate your current home, what comes next?
Thinking about financing options is a great place to begin your home renovation journey. At Great Midwest Bank, our loan options range from Home Equity Loans to Construction Loans, and experienced loan officers are happy to help you find the best fit for your renovation needs!
Here are three financing options for your home improvement project:
1. A Home Equity Loan
When it comes to a minor remodel with limited home improvements, a Home Equity Loan is a simple and less costly option. Rather than basing the loan amount on the value of the home after the remodeling project has been completed, our local loan officers will either use a new appraisal value or a tax bill to determine the current fair market value of your home. Home Equity Loans are flexible in the costs they can cover, making it a great loan option for reliable borrowers, and often with limited (or no) closing costs. The downside? Most likely a slightly higher interest rate than a traditional first mortgage loan.
2. A Major Renovation Loan
With local loan servicing and flexible underwriting using our own funds, our options can be a better financing option for larger projects. For this loan, our loan officers and appraisers take into consideration the value of your home after the major remodel is complete. The process of getting a renovation loan is very similar to getting a loan to build a new home, including the need for a contract, plans and specifications from a qualified contractor. For certain borrowers, a renovation loan from Great Midwest Bank may offer a minimal down payment requirement and a “one-time close” feature with permanent financing included. It also offers interest-only payments during construction followed by normal monthly payments upon completion of the project.
3. A Refinance
A Great Midwest Bank loan officer will help you find the loan that best fits your home renovation needs. A refinance of your mortgage prior to the home renovation process, using the existing equity in your home might provide enough funds to complete your project.
Though it may sound complicated, our loan officers make major renovation financing as simple as possible. These three financing options can help make your home improvement dreams a reality. Get started by reviewing our Construction Loan Application Checklist here. Then contact your local Great Midwest Bank loan officer or stop in at one of our conveniently located branches when you’re ready to get your home renovation project underway!