What is a home loan?
These are loans that provide you with money to renovate, remodel, or repair your home. Typically, this is granted in the form of a mortgage that includes additional money that you can use to make home improvements. Therefore, you’ll typically need to have some equity in the home to be awarded investor rehab financing.

How do you choose which loan is right for you?
There are several factors you’ll want to take into consideration here. Doing so will help to ensure that you get the best deal financially and the best fit for your needs. These include:

• Make sure that you have good credit or take some time to improve it since this factor plays a vital role in any type of loan you may request.
• Consider how much money your project will cost so that you can determine which loan you need and how much your monthly payments will be.
• Look at your monthly mortgage statement to learn how much equity you currently have. If you can pull money from your home to get a cash-out to refinance or a home equity loan, you’ll pay less than if you were to get a renovation loan.
• Take some time to shop around. There are many things you’ll want to consider here (e.g., payment terms, fees, rates), and taking the time to do so will enable you to ensure that you’re getting the best deal.

Is there anything else to watch out for?
Don’t get swept away in the excitement of a home renovation. There are some significant drawbacks that you should know about regarding taking out investor rehab financing. Some of these downsides may include the following:

• Making an investment that isn’t worth its cost. For instance, if you’re planning to sell your home, the buyers may not be willing to pay more for the type of upgrade you’ve made. Therefore, it’s important to consider if the renovations will increase your home’s value and by how much.
• Make sure you account for the total cost, which will involve more than just labor and materials (e.g., architectural and engineering services, inspections, permits).
• Be realistic with your timeline and any delays that may occur, as these may require additional money.

When should you take out a home renovation loan?
Investor rehab financing is a great way to obtain more control over your property’s equity, but you’ll only qualify if you’re making substantial improvements to it. Of course, this is just one of the many things you should consider before applying for investor rehab financing. Once you’ve thought these things through and determined that the benefit outweighs the cost, you’re ready to take out a home renovation loan. When this time comes, contact us at the Hybrid Construction LLC in Tampa, FL, and we’ll work with you to get the best renovation loan rate with a payment that you can afford.

Picture Credit: Freepik

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First of all, rehab means rehab. It doesn’t mean borrow money and go on a vacation to Las Vegas. It doesn’t mean spend the money on scratch-off cards either. It means you end the money to fix up an existing structure or one you wish to purchase. In a situation like this, the banks and homeowner all win out because a home or structure in disrepair is losing money, makes the neighborhood an eyesore, and no one gains.

The good thing about real estate is that it’s not going away anytime soon. It’s still probably their biggest investment you’ll make as an adult. A home is security in the bank even if you have a long-term mortgage. It’s something you can bank against to further your education or other helpful personal investments. The new forms of rehab loans are perfect for this.

Here’s the scenario. You’ve got a home let’s say is worth $300k on the standard market. It needs roofing repair and other repairs both necessary and cosmetic. The cosmetic part is of most importance because it’s what people see when they pass by your home. A home that looks shabby and neglected won’t fetch the market price nor be of use to anyone as an investment. It will bring down others’ property values and that’s no good at all. One would be surprised at how much a home’s value can skyrocket with just paint alone. A house worth $300k could look or become a value of tens of thousands more with a few thousand invested in new gutters, roofs, paint, landscaping. The new rehab laws afford for this and qualifications may be strict in some areas but for a good reason. The key is to use the money responsibly and not put oneself into deeper debt.

A good equation would be to have a home worth $300k and you take out a rehab loan for $5k. You use that money for shoring up the plumbing or electricity, fix the roof and above all else make the property look new with new siding or paint. The real estate speculators see your home and boost its value to $350k. Now you’re talking an ROI that not only pays off your mortgage, and loan but puts some extra money in your pocket.
Companies like Hybrid Construction understand rehab loans like no other. Their staff will sit down with you and go over such a topic each step of the way. It’s due to their understanding, compassion, and foresight that has brought this company into the limelight of homeowners who are desperately in need of a rehab loan so that they can either live well in their home or prep it for selling on the market. Just sit down with them, let them explain things out clearly and when the dust settles you should be on your way to responsible home ownership that pays you back for all your time, money, and effort.

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