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Explore Financing Options for Your Dream Remodel
Are you dreaming of a new kitchen, a luxurious primary suite addition, or a fully renovated home but finding it difficult to budget for these upgrades? You might be pleasantly surprised at the various ways you can finance your dream remodel. Here are three common financing methods that could help make your vision a reality:
Dreaming of an updated kitchen without knowing how to pay for it? Learn about financing options avlable for your new kitchen remodel.
If you've been living in your home for some time, chances are you have built up equity. For example, if your mortgage is still at $300,000 but your property's market value has risen to $400,000, you might now have an equity of $100,000. Most financial institutions will ext a home equity loan or line of credit HELOC, essentially giving you access to up to 90 of this equity as a secondary mortgage.
Another option involves leveraging the equity through refinancing your existing mortgage. Working with a banker could help determine whether taking out a home equity loan or refinancing is more suitable based on factors such as current interest rates, loan size, and equity in your property. A knowledgeable ler can guide you in making an informed decision.
Facing the challenge of not having enough equity to cover major remodel expenses? Consider looking into a future-value construction loan. This type of financing might be unfamiliar or even rumored among some financial advisors, but it's perfectly viable for large projects in established neighborhoods like Minneapolis and St. Paul.
Here’s how this works:
If your property is valued at $400,000 now and you're planning to add a full shed dormer that will increase its value by another $200,000, your future equity could be the key to financing your dream remodel with access to those $200,000.
A future-value construction loan is ideal for extensive renovations in older homes in desirable areas where property values are high and buyers are willing to pay top prices for updated properties.
Common Questions About Future-Value Construction Loans
As White Crane DesignBuild – a Minneapolis-based design-build firm – has seen many clients utilizing these loans, here are some frequently asked questions:
How do I find a ler offering future-value construction loans?
Ask your designbuild company for referrals. You'll want an expert ler and apprser who specializes in such loans to ensure the project's value is accurately assessed.
Do I need a down payment?
A common misunderstanding among homeowners, particularly those who've put 20 down on their mortgages, is that there might be no cash requirement with a future-value construction loan. However, you're borrowing up to 90 of your projected future equity determined by the apprser.
What if my loan doesn't cover the entire cost of the project?
If this happens, you'll need to secure funds for any additional costs before closing. For example, if your renovation requires $300,000 and your projected future equity only covers $250,000, ensure you have $50,000 avlable.
How will the financing process work?
The title company will handle payments to the contractor in phases: a down payment at the start followed by several progress payments based on project milestones. Periodic inspections are conducted to monitor project adherence to schedule and budget requirements.
Will any adjustments be made regarding property taxes?
Gl Vinje, an experienced future-value loan officer, assures that no tax authorities receive information about your future value calculations; these detls stay confidential between the ler and you.
Buyers are attracted to those historic homes in our city - but they often want modern updates. Future-value apprsals typically come with strong values in areas like South Minneapolis, St. Paul, Edina, and St. Louis Park, states Gl Vinje.
Unlocking Financing for Your Dream Remodel
If you're considering a renovation that feels out of reach, White Crane Construction can help explore your financing options. They'll connect you with an experienced ler who can assess if this type of loan might be feasible for your project. Schedule a complimentary consultation now to get started on realizing your dream remodel!
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Minneapolis, MN 55403
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