Financing Your Remodel: What are the Options? | How To Home Podcast
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- Опубликовано: 1 окт 2024
- This week, Javier Ruiz from New American Funding joins Aaron and Tracy to discuss all you need to know about financing a home remodel. We talk about cost estimation, how to decide the best financing options for you and which rooms will hit your budget the hardest.
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FAST Facts:
1. According to HomeAdvisor, the average kitchen remodel in the US ranges from $12,000 - $30,000 or around $150 per sq. ft
2. To hire a handyman the average cost is $390 ph
3. The average cost of a bathroom remodeling project is approximately $10,000, although this includes minor, partial, and small bathroom remodeling costs. A comprehensive bathroom remodel is likely to cost $15,000 or more; a large master bath remodel can easily go over $50,000.
4. Most people planning a house upgrade aren’t doing it in order to put a “For Sale” sign in the yard. In fact, only seven percent of homeowners are renovating to prepare their homes to be sold, the lowest percentage since 2015. (marketwatch)
5. The majority of homeowners (62 percent) plan to pay for projects, at least in part, by using savings. Other home improvement financing options include credit cards, 30 percent of homeowners say they’ll pay for a project using plastic. While credit cards are also a popular option for millennial homeowners, it is significantly less so than last year, down 16 percent.
6. Payment example: Monthly payments for a $25,000 loan at 7.99% APR with a term of 12 years would result in 144 monthly payments of $270.48. (lightstream)
7. A landscaping project can cost anywhere from $5,000 to over $100,000. When deciding on a budget keep in mind that investing in professional landscaping will greatly add to the value of your home. A general rule of thumb is to spend 10% of your home's value on landscaping.
JAVIERS’S TIPS:
- Find out what the value of your home is currently, and what you owe, to get a good idea of what you can get financially.
- Cash out refinance option can be a little pricier.
- Refinancing is getting a new loan that pays off your existing loan.
- Pro of refinancing is the liberty to spend the money the way you want.
- A drawback is rising interest rates.
- There’s a Fannie Mae financing option called Home Style- it’s a renovation loan that allows you to use the maximum value of your home to purchase and/or renovate a home. www.fanniemae....
- Pros: You’re increasing the value of the loan. You can add luxury items.
- Home equity line of credit is another option. The rate is a bit higher but gives you the flexibility to access equity in your home.
- Good for a small project where you can pay it off quickly.
- Your most affordable rate will be through a bank or mortgage company vs. a credit card or in-secure line of credit.
- Find a trusted loan officer who’s experienced in home loans.
- The bank isn’t necessarily the best place to start. Googling “construction loans” or “renovation financing” is a great place to start.
- Credit cards have very high interest rates.
- If a loan is going to create financial stress, consider splitting your remodel into smaller projects.
TO RECAP OPTIONS-
- Cash-out refinancing.
- Fannie Mae, Homestyle.
- Home equity loan
- 203k
- Unsecured loans
- Credit cards
- Cash
HOLLER AT JAVIER:
Email | Javier.ruiz@nafinc.com
Website | www.newamerica...
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I know she kept saying she was gonna ask stupid questions but honestly she helped clear a lot of things up! Thank you so much for asking the questions I wanted to! Simplifying everything he was saying really helped me on my journey so thank you! You have just gained another sub!
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Great info ! I cant think of another investment vehicle where you can borrow against itself to improve itself and LIVE IN. Next steps for me, find that mortgage officer to have a convo with.
These are the renovation loan options I took from the video:
1. HomeStyle Loan
2. HELOC
3. 203k limited
4. 203k full
5. Cash Out Refi
6. Credit Cards
7. Cash
Thank you. I needed a "too long, didn't watch" type summary.
I inherited a house that has been paid off. What are the steps I can take to remodel it? It’s about 70 years old and definitely needs upgrading.
Sell it.
Watch tutorials and renovate yourself. Grow your wealth.
I am on here to get as much information I can get, watching a lot of RUclips videos doing my homework, I am a first time flipping homes.
My husband and I are trying to figure out the best way to add outdoor patio, fence property and put in a swimming pool. We’ve been in our home going on 16 years. We have 1 acre & quarter. We currently have 2% interest.
That was the video i needed 6 months ago when i started learning about finance. I already understand everything he said after 6 months of self learning but this was like super base line simple stuff a super beginner will understand!
I'm in NY n I'm fishing for a loan for a home addition. I have a house that has a lot of equity but I don't want to refinance. What kind of loan can I apply for? Thanks in advance.
I just bought a fixer upper with cash and spent all my savings on it. I do plan on working my butt off to save more for repairs because it needs totally redone, I'm trying to figure out the best option to remodel it to get it livable for my family so we can get out of our rental and start putting the money we pay in rent and put it towards our house/other wants and necessities. What is the best way to go about this? If I don't have a mortgage and I own the house 100% but my credit is trash in the 500's can I still get someone to finance me for that and just pay them back?
Unless you absolutely have to have this particular house, you should consider doing a flip. If it's a fixer upper I assume you got it well enough below market to make a profit. You should talk to investors in your area for advice on finding reliable contactors that can promptly start as soon as the contracts are signed. Use a hard money lender, if need be, get the work done in the fastest time possible, refinance with a cash out option to pay off the hard money lender or whomever you borrowed from.
When you sell this home, you will make enough to move on to another property. Saving money to do repairs can take a lifetime. Smart people learn how to make money work for them. It's called positive debt and it's not the same as going into debt. Also, learn about the Brrrr method.
Brrrr= Buy, rehab, rent, refinance repeat.
You don’t pay for college with a cash out loan! Buy ibonds or take a student 0% interest loan while they are in school.
Add this to the terrible videos that help zero with home improvement options.
Some banks have Renovation loan whenever buying homes.
Ugh cash out refi into higher interest yuck ,
Love her questions, wish there was less mansplaining and the unnecessary “I’m going to ask stupid question...”
My God, triggered much? It must be exhausting to think that why all the time...
I wanted to hear about home equity agreement
Can you get a HELOC if the house is paid for? There is no mortgage on the home but would like to use an HELOC instead of personal line of credit. Does there been to be an active mortgage on the home before doing getting that second mortgage.
It would just be a regular mortgage.
A broker told me that I couldn’t do a cash out refi to do upgrades because I need to have 80% of equity in the home after I pulled out cash. So if I had a mortgage balance of 330k and if I wanted to pull out 40k that my mortgage after the refi would have to be $460k. So I scratched my head and said screw it I’ll just do one project at a time and I’ll just will pay out of pocket.
But I find this a bit off because the last home I had I was able to take out money to redo my roof and gutters if a total of 15k. So I don’t know I feel like this broker is trying to get me to sell my home to buy a home of more value.
Loan officers will quickly give money's for Roof gutters its not that costly and keels house dry
I found a home where the seller won't accept government sponsored loans. What are my options? I'm a renter and trying to buy a home, fix it, live in it and rent the bottom half.
Hey I know I’m late, but there’s still an chance the home is on the market. I am not sure as the market is going crazy these days. Anyways what loan do/did they accept?
Love this video! Great information 👍🏻
I know this video was 3yrs ago. I am a first time home buyer and my house needs allot of fixing. I need a newer better heating system because my current heating system is electrical, it don’t heat the house well and it cost allot monthly. My bathroom and kitchen needs to renovate the plumbing and electrical needs to redone. The issue I face is that I am a low income $35,000 a year and I max this on the mortgage and utilities so taking own a new loan would not be good for me right now. I wish to fix my house.
This is great! Thanks for breaking everything down for the average person 😅
so iam here to try to get someone to help remodel my Niece's house she is a single mom with five children and a nurse at Florida Community health center she is a very hard working mother that cant A forward to remodel the home it was her mom when she passway she sayed so that all the hard work her mom went through paying on it would go to Waste she want to start fixing it up but something happens that it get put to a stop please find it in your heart to help her out. her aunt DORA GONZALES GOD BLESS
Most solar companies do unsecured loans now no lien on home so that info was not correct. Used to be popular in past though
Cuidado con refinanciar porque también el credit score tiene mucho que ver
I really need some help, I bought a property that needs renovations. I want to Refinance for cash out.
you'll have to pay closing costs again so probably not worth it
Love what you all do! You're a source of inspiration for sure. Keep up the good work!
What about 401k loan?
Great informative video 👍
She seems so nice
ty sent me
Super helpful thanks.
its fine
great
Love it guys
Best advice I’ve come across!!
awesome content
what if you own your home. What options do I have.
You take out a mortgage on your own home.
According to the video..
Average kitchen reno in the US: $12,000-30,000
Average small (half or partial) bathroom reno in the US: $10,000
Average landscape reno in the US: $5,000-100,000
Meanwhile, my house cost $80,000. This is why major renovations are pretty much out of my price range. Especially if I am too nervous to DIY fixes. Because I don't want to do janky fixes like the flipper did before me. I've literally had to re-do everything they "did" because they were hacky and just to sell the house.
Going through this right now.
Not sure on your location but have you called at least 10-15 local contractors for quotes? You'd be shocked sometimes, even in 2022, that contractors will still have some wiggle room on their prices for your business.
Yea, those flippers only do cosmetic renovations. Be very cautious.