Perhaps you’re running out of space in the kitchen or one bathroom just isn’t enough anymore. Maybe you’re itching to build the entertainment center of your dreams. There are many reasons you might want to make a renovation to your Maryland home but there’s invariably one common stumbling block between them: financing your addition. The contractors at Cedar Square homes are here with a few bits of basic advice on how to go about funding the renovation or your Maryland home.
Equity Loans
If you’ve been making payments on your mortgage for some time, odds are you’ve built up a decent amount of home equity (equity is, essentially, the difference between your home’s market value and any associated debts). Equity can be used to either acquire a home equity loan or establish an equity line of credit. A home equity loan is essentially taking out a second, smaller mortgage with marginally higher interest rate. An equity line of credit is like a normal credit line, but with your home’s equity used as collateral. These options can be an easy way of financing your addition but should be chosen carefully because they will incur a substantial monthly fee.
Refinancing Your Mortgage
Refinancing your mortgage involves taking out a loan for a greater amount than your original mortgage, paying off the original, and using the excess funds to purchase an addition. Refinancing can be tricky to get a good deal with, but if you’ve put enough equity into your home you may be able to get an even better interest rate than your original mortgage. Lenders may also approve loans best on the estimated value of your house when the renovations are finished, which can help with more costly remodeling like the addition of a second story.
Apply for an FHA Title I Home Improvement Loan
Another way to go about financing your addition to your Maryland home: Ask the Feds for help! Title I loans are issued by HUD-approved lenders and insured by the Federal Housing Administration, and are available in limited supply. FHA Title I loans over $7500 dollars require a mortgage to be used as collateral but do not have any equity requirements and generally have significantly lower closing costs.
Cedar Square Homes
All told, there’s still a lot of complexity, even within the limited options presented above. If you’re looking for a top notch Maryland construction and remodeling company, who’s willing to answer questions about financing your addition, then come talk to the experts at Cedar Square Homes.
Your Maryland home improvement project is important to you and we will treat it the exact same way. Customization is absolutely no problem and the materials we use are top quality. Throughout the project we will stay in touch and be available for you when you need us.
You will have direct access to your project manager though the entire process. Calls are answered promptly and messages are returned within 24 hours.
Improve your home with home improvements by the professionals at Cedar Square Homes. Contact us today at 410-987-9771, or through our website.
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