Thursday, 23 January 2014

How to Finance Home Improvement

With the world cup football being played in South Africa in 2010, there have been many reasons and opportunities for South Africans to finance home improvement, as many people are looking to capitalize on their chance to rent out their homes for the event. The better the facility the more rent one can charge.
Now one not only increases the long term value of ones property, but also has a sure fire way to pay of, at least a god chunk of the home improvement financing and who knows, maybe one can make a profit as well. Now this is of course of no use to anyone outside of South Africa, but there must be some sort of event you can think of that could offer a similar opportunity. For example, in London they have the Olympic Games coming up in 2012.
You see, a huge variable when it comes to making money, including renting out property, is timing. Keep looking out for that special reason to start your home improvements, and getting a home improvement loan suddenly stops being a 'calculated risk' and more 'good timing'. There are suddenly more reasons on the pro side than on the con side.
Even so, do not forget to do your homework. Make sure, even though interest rates on a loan are low at the moment, consult with your loan officer about what kind of escalation you can expect and if you should fix the rate. Remember to work with you finance company as these people are your partners in this thing and it is to the advantage of both to make sure this thing goes smoothly.
Besides your loan officer, make sure you have any other necessary connections in place. For example if you were in South Africa, looking to rent out a property during the world cup, inquire at a few estate agents that specialize in home rental and are looking for properties to fulfill the demand. Make sure all your insurance is in place as well just in case the football fans you rent out to be disposed to be a little 'overenthusiastic' in the same example.
This way you can cover as many angles and bases as you can before you even finance home improvement []. Just bear in mind that the famous millionaires and billionaires of the past did work hard and did make their sacrifices but the thing that did eventually take them too new heights was, in the end simply luck. They were lucky enough to have the right product at the right time, so do not get too cocky, get careful and thoughtful. Use a good plan to take as much of the consequences out of the hands of fate and into a good strategy.

Finance Home Improvements Through Refinancing

It is possible to refinance your home loan for a higher amount than your outstanding loan and seize the benefits of equity by obtaining additional funds for financing your home improvement projects.
This is not a traditional system for financing home improvements but it serves its purpose exceptionally. And it can guarantee you all the funds you need at very reasonable rates and with a flexible repayment program. Moreover, compared to other sources of funds, especially unsecured ones, refinance home loans are inexpensive financial products.

Home Improvements 

Making home improvement requires high amounts of cash. However, the costs of financing home improvement projects can really be too elevated. There are no particular sources of finance for home improvements other than some home equity loans and lines of credit. However, these same sources can be used for other purposes and given that they use a property with a mortgage as collateral, the interest rate charged is usually higher than that of the mortgage loan.
Whether you need money for fixing a roof, adding a bedroom, painting, tiling, making the kitchen new, etc., the need of finance is almost unavoidable and though it might sound strange, resorting to a refinance home loan might be the cheapest option compared to the rest of the financial products on the loan market.

Cash-Out Refinance Home Loans 

Cash out refinance home loans let you obtain additional money from the equity you've built on your home. This can be done when your existing mortgage loan represents an amount of debt lower than the value of the property that is guaranteeing the loan. The remaining value still let's you obtain extra money as it can guarantee additional funding.
For instance: if you have a property that is worth $120,000 and your current mortgage debt reaches up to $80,000, this implies that you've got $40,000 left of equity. Though you can't expect to obtain 100% financing unless your credit is impeccable, you can still easily refinance your home loan and obtain a $100,000 loan which after repaying your current mortgage will leave your with $20,000 to finance your home improvement project.

Benefits and Drawbacks 

There are however, both advantages and disadvantages when you decide to refinance a home loan. Depending on the loan terms, on market conditions and on your credit score and history, you might be able to obtain a lower interest rate than your current mortgage loan. If this is the case, you'd be saving thousands of dollars over the whole life of the loan. However, it is not always possible to get a lower interest rate.
If you need to cope with a higher interest rate or if you need to extend your loan repayment program too much, you might end up paying huge amounts on interests and thus, your home improvement project may turn out to be excessively expensive. So, if you are considering a cash-out refinance loan to fund your home improvements, make sure to ponder all these variables to see if it is really to your advantage.