Mediterraneo Design & Build
3475 EDISON WAY, SUITE C, MENLO PARK, CA 94025
P: (650) 368-1361 | F: (650) 368-1557
info@mediterraneodesignbuild.com | www.mediterraneodesignbuild.com
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Home Improvement Financing Part 2
Existing Mortgage Refinancing
By far, the most common way to finance home renovations and rebuilding is through mortgage refinancing second mortgages. The benefit is that homeowners have more options than with, and only have to make one monthly payment. Naturally, interest rates play an important role in deciding if mortgage refinancing is the best option. If a refinanced loan involves a higher interest rate than the current mortgage, a second mortgage could be a better option. Some of the options available include 203(k) mortgages through the FHA, traditional cash-out mortgage refinancing, or B and C loans.
Older homes in need of repairs and upgrades may be eligible for a 203(k) mortgage. These loans pay off the existing mortgage as well as providing funds for renovations, all wrapped up into one loan, with one mortgage payment. Loan amounts are based on the improved value of the home, rather than current market value.
Traditional cash-out refinancing allows the borrower to take out a loan for the full value of the home. The old mortgage is paid off and the homeowner keeps the cash difference to fund renovation projects.
Alternatively, B and C loans are offered by financial institutions beyond just banks, such as credit unions or brokerage houses. These loans are typically marketed for debt consolidation and carry higher interest rates. However, B and C loans often have less stringent qualifying criteria.
Every borrower's situation is different. Credit history, current home value, mortgage balance and other factors can influence what home improvement financing options are available to individual borrowers. Before taking out a second mortgage or refinancing a mortgage, it's advisable to consider several funding offers. You should compare factors such as payment amounts, interest rates and other loan terms before deciding on a specific funding solution.
Courtesy: http://www.home-style-choices.com/home-improvement-financing.htmlMediterraneo Design and Build is a leading residential design, construction and remodeling company in Menlo Park CA. They are known for both their design skills and construction quality. To discuss your custom building, remodeling and other home improvement needs, contact them at phone no. (650) 368-1361, fax no. (650) 368-1557 or email info@mediterraneodesignbuild.com. Information about the company and a partial portfolio of projects they have done is available at www.mediterraneodesignbuild.com.