Should You Use a Home Equity Loan to Make Renovations?
With more people working and learning from home – and with no real end in sight for the Coronavirus – home renovations are on the rise. While updating or reconfiguring your residence can help to make your home more custom fit to your specific needs, though, there are some expenses involved. So, what are some of the options you might have available to pay for the project(s)?
One alternative is to take out a home equity loan. These loans are a form of “credit,” where a home may be used as the collateral for the borrowed funds. The money received from a home equity loan may be used for nearly any purpose, including payment for college costs, medical bills, emergencies, and home improvement. In addition, the interest that is paid on this loan may be tax-deductible.
If you opt not to go the route of a home equity loan, there could be some other alternatives for obtaining the needed funds, such as:
- HUD Title 1 Property Improvement program – Property improvement loans may be used for financing repairs, alterations, and improvements on homes that have been occupied for at least 90 days. In this case, the improvements must “substantially protect or improve the basic livability or utility for the property.”
- 203(k) Rehabilitation Mortgage Insurance program – This program allows homeowners (and home purchasers) to borrow an additional $35,000 via their mortgage for home improvements and/or repairs. (A 203(k) Rehabilitation Mortgage Insurance loan may be used in conjunction with the HUD Title 1 Property Improvement program).
We Can Help!
If you’re considering a home improvement project, and you reside in Orlando or the surrounding Central Florida area, give LP Design and Renovation a call. Our designers can work with you in coming up with a viable plan for your home’s updates, as well as an estimate of the cost. You can reach us by calling (407) 901-6215, or by going to our website and completing our contact form at https://lpinspiredrenovations.com/contact/.
About Title 1 Property Improvement Loans. HUD.gov https://hud.gov/program_offices/housing/sfh/title/ti_abou
Home Equity Loans. USA.gov https://usa.gov/repairing-home#item-36547