Home >> Financing Options
If you need assistance in arranging financing for your remodeling project, your Project Manager can help you review some of your options. Your financial advisor, banker, or accountant may also help you determine what is best for you.
Listed below are some of the different types of lending arrangements that are available. We've also provided the names of several lenders who have assisted many of our clients with their projects.
Both the interest rate and payment remain the same over the term of the loan. Loans can be amortized over the following terms: 10, 15, 20, 25, 30 and 40 years. The advantage of a fixed-rate program is that it protects you from market fluctuations in the lending rate. This type of financing is recommended for borrowers who intend to stay in their house for a long period of time. Recently some lenders have added an interest only feature to their fixed-rate product menu.
Both the interest rate and payment remain the same until the loan is due. Typically, that occurs at either 3, 5 or 7 years. The advantage of balloon programs is that they tend to have the lowest rates due to the fact that the entire balance must be paid off or refinanced at the end of the term. This type of financing is recommended for borrowers who know they will be leaving their current house in 3, 5 or 7 years.
Both the interest rate and payment remain the same for a fixed time period, usually 1, 3, 5, 7 or 10 years. At the end of that period the rate can rise at fixed intervals. The amount the rate increases is predetermined (normally 1/2% to 2% per rise). The intervals are normally 1, 3, 6 or 12 months. The advantage of an ARM is that it allows you to get a lower initial rate. It is recommended for those borrowers who intend to stay in their house for a shorter period of time.
One of the best ways to finance that new kitchen or bath, or any addition or renovation you are planning, is a "Renovation Loan." Renovation loans are a specific type of home equity loan. They put the equity in your home to work for you to make the improvements you desire. Renovation loans have been popular for years because the financing is tied to the appraised value of your home AFTER the renovation is complete! If you’ve owned your home for less than 12 months, you’ll be required to use the purchase price or your home plus the renovation cost as your basis. If owned over 12 months, appraised value is used, if over cost.