Thinking about calling sunroom addition contractors for your home remodeling project? Everything you do from here starts with the budget. How much are you willing to spend? Are you going to pay out of pocket or will you be getting a loan?
If you’re thinking about loans, this information is perfect for you.
When Should You Take Out a Loan?
If you want a renovation now but don’t have enough cash to pay for it, a loan is a good idea for financing your project. There are loans for different needs, from roof replacement to sunroom additions. Even screened patio companies may offer a loan or direct you to a lender they trust.
Different Types of Loans
Here are the different types of loans you should look at if you have plans to start a remodeling project:
• Home Renovation Loan – To come up with the combined-loan-to-value (CLTV) ratio for this loan, the value of the home in the future, including the renovation, is taken into account. You don’t have to refinance your first mortgage for this. This loan usually comes with the lowest fees and the lowest rates for 10-15 year terms. However, this is a home equity loan, and it might max out at 20 years.
• Single-Close Construction to Permanent Loan (CTP) – Single close means you’re going to sign only a set of documents and pay only a set of closing costs. The CTP will convert to a permanent mortgage. That mortgage may mean a fixed amount paid over 30 years. It’s like refinancing your first mortgage. Note that when you refinance, it might be for a higher rate.
• Fannie Mae HomeStyle Loan – This is exactly like CTP, but instead of coming from a private bank, this loan is Fannie Mae-insured. Fannie Mae is government-sponsored. This type of loan usually has a higher rate.
• FHA 203k (Full) – This is exactly like Fannie Mae, but it’s insured by the Federal Housing Administration, another government agency.
You can choose from among these lenders to finance your home renovation project. You can also get some advice from your project’s contractor. For example, bathroom renovation companies typically work with lenders that are used to financing the projects they work on. Some also have in-house financing when they partner up with a lender.
We can help you at Envy Home Services. Call us today at (888) 847-7954 toll-free, or fill out this form for an estimate.