You can get your dream home by building or buying an existing one. When you go for the latter option, instead of a traditional mortgage, you will get a construction loan. On the other hand, if you are sick of the same old look of your home, you can go for a renovation loan.
Construction loans are given to build or rehabilitate a house. Under these loans, it is the bank and not the borrower that pays the builder depending on the accomplished work. Whereas a mortgage company pays traditional loans in one lump-sum at closing, a bank pays construction loans in installments. Upon the completion of the entire project, the cost is transferred to you.
Construction loans are both short-term and a little more expensive due to their higher interest. Furthermore, they are based on the value of the home once completed. Given that this loan is variable, it is advisable to work with an experienced builder, familiar with budgeting and scheduling. Research can help you to land a builder who will work within these limits.
Why You Should go for Construction and Renovation Loans
To improve for rental
If you are a landlord or planning to become one in the future, you may have to renovate your house before the arrival of new tenants. To save on these costs, it’s advisable to invest in professional contractor services as they are likely to build improvements to last.
To improve your current home
Homeowners have the option of selling their current homes and buying new ones or renovating their houses when interested in making updates. As a homeowner, you may go for renovation as it can enable you to change the look and layout of your home without having to move. At Highlands Mortgage, we can help you when you need a renovation loan to add another room, repair your garage, or undertake any other type of repair or remodeling in your home.
To increase resale value
When you are planning to sell your home, the renovation will boost its resale value. You may be planning to add living space or improving the home's appearance. Renovation loans can go a long way in helping you to achieve this dream. However, it is advisable to consider your location before renovating your property. If your house is located in places where prices are lower, don't go for expensive renovations as you may incur losses.
To renovate a new home
Sometimes, you may buy a new home and find out you need to do some repairs. You may require a renovation loan to carry out these modifications.
Do you need construction and renovations loans to improve your home? Our mortgage lenders in Delaware are there to handle any kind of mortgage situation and get the best solution for you.