Home additions are a common alternative to moving to a larger property. The wonderful thing about renovating is your ability to customize the space and ensure it matches your personal needs. Knowing home addition financing options in Florida can be useful. The following are a few to consider.
Unsecured loans are not specific to a property but can be used for home additions. This is typically the last resort because unsecured loans come with higher interest rates than home loans. Also, amounts paid for interest may not have any tax benefits. Some individuals use unsecured loans as short-term funding. When additions are done, your property value will appraise for more. This might enable you to then get a home equity line or pursue refinancing an existing loan. That may subsequently be used to pay off unsecured loans.
Home Equity Line
If you have a lot of equity in your home, ask about a home equity line. Many lenders will loan up to roughly 80% of the market value of your home. A Home equity line offers low rates and low fees. Interest payments can be tax deductible (check with your accountant to find out). However, the loan length is usually only 10-20 years and applicable rates may change.
Refinancing An Existing Loan
Refinancing an existing loan is a great way to access equity without keeping more than one loan. This is a great way to distribute your home addition costs over more years and benefit from fixed rates. The amount of equity you may take out depends on the particular loan program and the market value of your property. There are normally closing costs when refinancing a home (because you are technically obtaining a new loan).
Home Addition Financing Options In Florida
Contact an experienced loan consultant for information on these alternatives. Additionally, there are sometimes special home addition mortgage programs that you may be able to use. Regardless of which option you select, remember that your ongoing monthly home expense will be greater as a result. Prior to making a decision, understand what you can afford and what work can be achieved with your price point. The information on home addition financing options in Florida in this article are offered just as a general overview.