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Owning your own home is an amazing experience. It allows you to feel like you genuinely have your own little corner of the world. It is your place of solace and refuge on a bad day and memory making with your family. It is the hub of your daily life.
Eventually, though, life takes its course. Your family may grow along the way leaving you with the need for more space. Your home may fall into disrepair prompting maintenance repairs or you may just decide one day that you need a change of scenery and decide to invest in some remodeling.
Either choice can be expensive will usually leave you little choice but to take out a loan to help with the cost. Below are some things you should keep in mind when determining if you need a loan and which one might be more appropriate for your needs.
What Kind of Improvements Do You Need to Make?
There are all kinds of things you can do to your home that count as home improvement ventures. Which one will determine what kind of loan you need, should you need one. An FHA 203 standard loan will be the best choice if you need to do repairs, add a new room, or rebuild from the foundation up.
The limited version of the same type of loan is better for more cosmetic improvements. There are also loans that come into play when you buy a home that has some repairs that already need to be done.
This type of loan will allow you to roll the price of the repairs into the price of the home. Just a side note, but there are also grants available for home improvements. The requirements are usually much more restrictive.
How Much Time Can You Devote to the Project?
The majority of us have rather busy lives. With a full-time job, spouse, children, friends, and the time we set aside for entertainment, there is rarely enough to do much else. However, there are times in any given year where some of that time is freed up whether it be by summer vacation, time off from work, the holidays, or those wonderful weekends.
The trick here is to calculate how much time you will have to devote to improving or repairing your home. If you have less time than you need, you will have to consider hiring some help. That venture will add to the amount you need to ask for when applying for a loan. You will need to make allowances for payroll and extra amenities, like lunch. (It’s polite to, at least.)
How Much Money Do You Have?
Last, but certainly not least, calculate how much money you already have. There are not many who have the budgeting skills of Dave Ramsey, but it happens. If you have enough in your savings to finance your own home improvements, obviously, there is no need for a loan. Maybe you only have about half of what you will need.
Be careful, though. Some loans have a reserve or a certain amount of money you have to borrow if you are to take out that loan. For the FHA 203 we discussed above, it’s $5,000. Then again, you may have all but maybe $1,000. Here, we would recommend taking a little more time to save your money. Waiting can be a pain, but escaping the interest on a loan is worth it.
Home improvements are guaranteed to happen at some point in the life of your home. Use these tips to help you know how best to afford them.