Home Improvement Loans in 2012: The New Housing Market
Radio, TV, Internet ... the headlines are all over the place right now: "Flood of foreclosures to hit the housing market." Even shadow inventory is becoming a mainstream term in the news. What does this mean for the current market? Among many things, it means a lot of the housing stock will be vacant homes left behind by foreclosed homeowners. Whether they left it in disrepair or the house has been empty so long it needs work, most of these houses need at least a little TLC. In other words, buyers can get great deals and spruce up the house with home improvement loans like the FHA 203k and HomePath Renovation.
This is the new housing market: homes for sale at low prices in need of renovations, improvements and repairs. Fortunately, home improvement loans help buyers roll the cost of this work directly into the mortgage, amortizing the cost of the work over the life of the mortgage. A $25,000 repair bill is daunting. But what about $150 a month? That seems more acceptable, doesn't it? With a home improvement loan like the 203k you can add about $6 per month to your house payment for every $1,000 in repairs or improvements you finance.
Think about it this way. As a buyer, you want to find the perfect house that meets your design needs and decoration desires. Unfortunately, not everyone shares your eye for detail. A house in the perfect neighborhood with the right number of bedrooms may have old windows, a missing furnace and terribly ugly carpet. Or a house with just the right (brand new) carpet and laminate floors in the right school district is missing the deck you dream about and the basement smells like gym socks.
All of the issues we just listed are eligible for special renovation financing with home improvement loans. Instead of moving onto the next house and the next house and the next house - you get the idea - you can turn the house you like into the home you love, rolling the cost of the work directly into the same mortgage. This means the interest rate is low and a tax write-off. It means you pay one bill to one lender. It means you can buy a home for under market value, add in the improvements and create instant equity in many cases.
All of this works for current homeowners as well. In fact, if you own your home and you want to make improvements to it (but don't have the equity needed for a HELOC) then you can refinance and remodel with the FHA 203k. This is the current market. If you don't want to sell your house but you want improvements made, you can refinance and renovate. If you're a buyer looking for a good deal to customize to your taste and needs, you can buy and make the changes in one loan. Home improvement loans in 2012 are definitely the new housing market.
Learn all about your home improvement loan options with our free eBook, "The Ultimate Guide to Home Improvement Loans" at the button below. From home equity loans to the FHA 203k, you have a lot of options to buy & renovate or refinance & remodel. Get your free copy today.
(foreclosure: Flickr user Jeff Turner)