For most people who decide to re-build or significantly remodel their home, financing the project is a major concern. In the past, getting a loan through a local bank was the most common way to pay for a home improvement project. However, this is just one of several options that are available to homeowners today. Before you start exploring them, it’s important to have a realistic idea of how much you’ll need to borrow to pay for the entire project. You should also know your credit score, since having good or excellent credit gives you a lot of leverage in negotiating favorable loan terms.
Traditional Loan Options
A typical installment loan from a bank offers a fixed monthly payment and the same interest rate throughout the life of the loan. The interest rate the bank offers you depends on several factors, including your credit rating and income. The length of the loan and the amount you are required to pay each month may also be dependent on these factors.
A home equity loan, also called a second mortgage, is another type of financing that may be available to you through your bank. Upon loan approval, you can borrow the full amount of equity that you have built up in your home. Equity is the appraised value of your house, minus the amount that you have already paid on it. Should you choose this route, it’s important to understand that you are offering your home as collateral—the lender could foreclose on it if you failed to make timely payments.
You must also pledge your home as collateral when you apply for a home equity line of credit. The way this differs from a home equity loan is that you can borrow on it repeatedly up to the amount of your credit line, and the lender doesn’t give you the loan in one lump sum. Instead, the lender may issue you a credit card or checks that you can write to yourself or a creditor. There is typically a minimum withdrawal amount for each transaction on a home equity line of credit. It’s important to compare interest rates and other terms with this type of financing, as they can vary considerably between different banks.
Paramount Builders Financing Partners
You have an idea of what you want your home to look like, but can you afford it? Paramount Builders has offered the best products at the most competitive prices for the past 23 years. Our partnerships with roofing/siding/gutter vendors have also helped shape our relationships with finance vendors as well.
If flexible loan terms, low interest rates, and affordable payment options are important to you then let our partners help you plan your home improvement project with Paramount Builders. Our company has close partnerships with several financial institutions and lenders that can offer you an ideal loan for your situation. One of our finance company partners may even be able to offer you deferred payments if you finance a specific amount. When you’re ready to rebuild or remodel, contact Paramount Builders to find out more about your options and financing partners.