Ready to Renovate? How to Get Loans for a Home Addition
Learn how to fund your home addition floor plans.
You’re ready to design your own home in Hingham, MA, but you don’t have the funds available to complete the project without financial assistance. Many homeowners aren’t in a financial position to pay for home remodeling projects on their own. This is why it’s important to know how to get a loan to make your home addition floor plans a reality.
Consider the Loan Type
Finding the right kind of loan for your custom built home plans in Hingham is extremely important. For most homeowners, there are two main options from which to choose:
- Home Equity Loans – When you have equity in your home, which refers to the difference in the value of your home versus what you still owe on the mortgage, you can take a loan against that amount. However, most lenders prefer for homeowners to leave at least 15 percent of their equity unused.
- Home Improvement Loans – Similar to personal loans, these loans require specified collateral in exchange for lending the money. This is often the only option for homeowners who don’t have equity in their homes. However, this type of loan often has a higher interest rate. You may also be approved for less than what you need.
You need to get a loan to carry custom built home plans.
Don’t Forget to Shop Around
Keep in mind you don’t have to get a loan through the same company as your mortgage. If you’re working on home addition floor plans, it’s often best to shop around and look for a lender who will give you the best rate for your loan. Your mortgage lender should be one of those companies, but you shouldn’t assume they will give you the best rate simply due to your history.
Get Approval First
While you may think you have good credit, you might not be approved for a loan as easily as you expect. For this reason, it’s important to get approved for your loan before you take the next steps with your contractor. When you design your own home in Hingham, MA, your contractor needs to know you have the funds to pay for the project before they can get started.
What to Watch For
Like all other financial loans, there are certain things you should look out for to prevent complications. For instance, if you’re planning on selling your home in a few years and your remodeling projects are designed to increase the value of your home, having a loan may reduce the profit you make from the sale. A home improvement loan can also make it more difficult to refinance if you want to lower your interest rate.
Getting a loan to cover the completion of custom built home plans in Hingham is often an important element. It’s crucial to understand the different types of loans for which you may be eligible, as well as how to obtain one so you can move forward with your plans. As long as you exercise caution in borrowing money, just as you would in any other situation, you will get the beautiful home you want without putting yourself in financial jeopardy.
If you’re looking for a contractor to handle your home addition floor plans, contact us. Our Massachusetts contractors can help you build the home you’ve always imagined.
