Can I get extra home loan for registration and other home renovation and home appliances?
If you qualify, you can get a home improvement loan. These are offered by the Federal Housing Administration or conventional home improvement loans can be insured by Fannie Mae or Freddie Mac. The FHA 203(k) loan is a great option for those with lower credit or those that can’t afford a large down payment. It requires a down payment of as little as 3.5%. Conventional loans are a better option for those that can afford the downpayment or have good credit since the mortgage insurance is significantly cheaper and the rates tend to be better. There is typically an appraisal of the property done in its current state and then an estimate of its future value once the improvements are made. Generally, as a condition of the loan, someone will come out and verify that the improvements have been made so that the loan can be completed.
The FHA 203(k) has strict requirements and guidelines to follow for your renovations. The timeline for either type of loan is that, generally, work must be done by the 6 or 12-month mark. Disbursements are made following an agreed-upon schedule. The borrower and lender agree upon that schedule of disbursements during the home improvement process. Smaller projects may benefit from a simple four-step schedule. The lender can disburse 30 percent of the loan balance over three steps, withholding 10 percent for disbursement after the project is complete and the borrower is satisfied with the finished product. More complex projects may require five to seven disbursements as specific items --electrical, plumbing, framing, and finish work -- are completed and inspected.
Appliances are a grey area in the home improvement process as they are typically considered personal property and not financeable through a mortgage. However, there are options for home equity lines of credit (HELOC) or cash-out refinance that have less scrutiny on how the money is spent than with a home improvement loan. These are open-ended loans for a negotiated percent of your home equity which can be used for any purpose. If you don’t draw any of the available credit, you owe nothing. If you draw a small amount, you begin making payments only on that amount immediately. With a home equity line of credit, you can make large improvements in small steps over time.