Regardless of whether you are planning a home remodeling project or a custom home build, it will cost money. And very few families have that kind of cash stashed in the bank, in the safe, or under their mattress. Since most of these projects require a loan, it’s important to know, a.) how to get the right loan prequalification, and b.) how to make sure that every dollar of that loan is spent wisely so that your investment turns out perfectly. Let's discuss the best home renovation loans and how to get prequalified for them.
We also have resources about budgeting for a home remodeling project, or for custom home construction. For example, if you are building a custom home, you will need to factor the price of buying land into your budget. Remember: talk to your trusted financial advisor for personalized financing options for remodeling a home because they know you and your situation and can help you with the prequalification process.
First, you have to ask yourself whether your plan is to remodel the home you already have, or if you are going to go big and have a new, custom home built. These two loan processes are different. The answer to the question, “How to finance a remodel?” is usually much simpler and requires fewer steps than custom home construction financing, which includes more steps due to the larger purchase of land and just building in general from the ground up. In either case, careful planning is key, and it’s best to have a good idea about the following beforehand:
Let’s look at the differences between financing a custom home or remodeling an existing one:
There are several answers to the question, “How do home renovation loans work?” because there are many different options. Here are some, and what to expect from each different type:
As a note of advice, credit cards, and unsecured personal loans are not always the best long-term options, though they will do in an emergency. It is always a good idea to talk with your financial advisor to answer the question: “What kind of loan should I get to remodel my house?”
And if you’re asking, “Can you get a loan to build a custom house?” The answer is yes. But it is more complicated, just because there are so many more steps and expenses to account for. Often, as many as two or three different loans may be needed to:
Some lenders will allow you to bundle these different loans into one, but it’s always important to run the numbers to see which options will give you the most flexibility and the best price over time.
If questions like, “How do I get prequalified for a construction loan?” or “Are there home renovation loans with no equity?” are keeping you up at night, you’ll definitely want to take a good look at your finances with your financial advisor who can help you devise a plan to prequalify for a loan that helps you get the most value while making sure you build or remodel a home with the quality of life and good resale value in mind. At the same time, you’ll want to talk to the Twin Cities' top design-build experts about the process of accomplishing your remodeling or custom dream home. By working on these two lines of inquiry at the same time, you can find out how much you will need, how much you can afford, and what to do next. At Black Dog Homes, we are excited to help you on your journey, so please contact us today for a personal consultation.
Black Dog Homes took this traditional main floor living space and transformed it into an open floor concept complete with modern kitchen/dining room, living room, office and powder room.
Deep Haven Custom Home
This beautifully renovated cottage turned story-and-a-half is the perfect home for the baby boomer or busy professional at 1,750 sq. ft.! The main level boasts an open architecture layout with 9' ceilings, a quaint covered front porch and 10' sliding French doors leading to a decorative maintenance-free deck and private courtyard.