Financing Your Renovations

If you have chosen to renovate your home then you know the price can easily exceed your predictions. Home renos tend to have what is known as "scope creep." This is when the renovations start and as they progress new things or problems cause there to be more work than originally predicted. This can be difficult to deal with is funding is limited so its a good idea to build contingencies into your financing plans right at the start. That way when the surprises pop up, you will be ready for them.

When thinking about renovation financing there are two likely candidates for you to consider. The home equity loan and the home owner's line of credit. The amount available for a home equity loan is based on the amount of equity that you have built up in your home. This loan is sometimes referred to as a second mortgage. It is calculated by taking the value of your home and subtracting the amount left outstanding on the original mortgage. If you own your home outright, then the amount would be the home's value. As an example, if you have a home that is worth $250,000 and you have already paid off $110,000 then your accumulated equity would be $140,000. The value of the property is what guarantees the loan so the interest rate is low as well as they payments. It is also normal to be able to secure fixed interest rates for such loans.

The other popular financing option is the home owner's line of credit. This loan does not have a finite amount save for the limit which is once again decided by your equity. This is a popular option as it allows for a lot of room when considering costs. The loan operates much like a credit card, with a variable interest rate. This is certainly the most flexible of the options and does not have a definite end date. The line of credit remains open for as long as you need it and do not close it out.

The best way to discern which type of loan is proper for your needs is to confer with a financial expert or banker. Prioritize your needs and try to find a loan that is tailor made for you. Remember that your home is going to be on the line as collateral so be sure to plan your payment schedule carefully and within what you can afford to pay. Make sure that you research all your options here and find what work s for you and for your budget.

Posted by Brad Korn on December 13, 2008 at 12:00 AM

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Brad Korn is affliated with RE/MAX Professionals, which is located in Blue Springs, MO. For further assistance please use the contact information located on the right.

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Local Information for Blue Springs, MO

Latitude: 39.017794 -- Longitude: -94.274421

ZIP Codes for Blue Springs, Missouri	64013 64014 64015
Area Code for Blue Springs, Missouri	816
Time zone for Blue Springs, Missouri	CST

Other Area Cities: Grandview, MO Lees Summit, MO Liberty, MO Belton, MO Blue Springs, MO Independence, MO Raytown, MO

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As of the census of 2000, there were 48,080 people, 17,286 households, and 13,362 families residing in the city. The population density was 1,020.5/km² (2,642.7/mi²). There were 17,733 housing units at an average density of 376.4/km² (974.7/mi²). The racial makeup of the city was 93.18% White, 2.93% African American, 0.43% Native American, 0.97% Asian, 0.11% Pacific Islander, 0.83% from other races, and 1.55% from two or more races. Hispanic or Latino of any race were 2.76% of the population. There were 17,286 households out of which 42.5% had children under the age of 18 living with them, 63.1% were married couples living together, 10.5% had a female householder with no husband present, and 22.7% were non-families. 18.1% of all households were made up of individuals and 4.8% had someone living alone who was 65 years of age or older. The average household size was 2.77 and the average family size was 3.16. -- Source: Wikipedia.com

Missouri 2000 Census Population Profile Map

	Blue Springs	Missouri	United States
Population	48,080	5,595,211	281,421,906
Median age	33.1	36.1	35.3
Median age for Male	31.9	34.8	34
Median age for Female	34.1	37.4	36.5
Households	17,286	2,194,594	105,480,101
Household population	47,834	5,433,153	273,643,273
Average household size	2.77	2.48	2.59
Families	13,361	1,476,516	71,787,347
Average family size	3.16	3.02	3.14
Housing units	17,733	2,442,017	115,904,641
Occupied units	17,286	2,194,594	105,480,101
Vacant units	447	247,423	10,424,540

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Financing Your Renovations

Local Information for Blue Springs, MO

Latitude: 39.017794 -- Longitude: -94.274421

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