In Kingston home renovation loans are becoming very popular especially with the tax deductions that the government have introduced in recent years. These are loans taken out to finance improvement projects in and around the home. The intention of these home renovations is to increase the value of the home. The type of renovations may include; repairs, new extensions, landscape upgrading, swimming pool construction, and replacement of parts such as counter tops, floor tiles and so on.
It is important that any homeowner considering any Kingston home renovation loans to finance a home project, draft a detailed plan first. In this plan, they should outline the items to be improved, timeframe and the estimated costs. It is also wise to include in the plan the expected values of the improvements. By reaching out to contractors the home owner can get an accurate estimate of costs. This will be invaluable is because the lender may need to assess the plan and cost first before approving any new mortgage or loans.
There exist several different kinds of financing options for homeowners in Kingston Home renovation loans available to you are discussed in brief below.
Not everyone has their mortgage paid off. But, if you do, then you could apply for a first mortgage. The funds from the first mortgage refinance would be used for the home renovation. The loan will be registered against the property as a first mortgage. It is possible that if you have a first mortgage and have equity in your property that you can refinace your first mortgage to get a new first mortgage of an increased amount to cover the expenses of doing the home renovations
More typically most homeowners already have a first mortgage. Most first mortgage lenders will only loan up to 75%-80% loan-to-value (LTV). If there is a limited amount of equity in a property then it may be necessary to get a second mortgage. Depending on the city some lenders will lend up to 85% LTV, and occasionally in rare situations up to 90% LTV.
Home refinancing provides the borrower with the following options: debt consolidation, reduced payments, and iquick access to funds for home improvements.
Other types of loans are; Unsecured Loans and Grants
Will the loan be a home equity loan, first mortgage, second mortgage or line of credit?
You need to research and make comparisons between different lenders first before settling on one.
To approve your loan request, the lender will first need to analyze your credit report and current financial status. Your Debt ratio is an important factor that lenders use to make credit decisions as well and may determine which option may be available to you.
If the borrower plans to sell the home in the near future then a line of credit may be a better option as it can be paid off at any time, compared to a fixed term mortgage which may incur penalties and interest to discharge before the end of the term.