Most homeowners will want to make renovations on their homes at some point. They may either want to refurbish aging or damaged parts or make extensions to the property. Either way, a home renovation breathes new life into the property and increases its value. But what is the drawback? The biggest obstacle home-owners face is financing the planned renovations. To overcome this obstacle, most homeowners take out loans from a lending institution. But qualifying for such a loan is not easy. Here are some steps to make financing a renovation easier.
Check Your Credit Score
Your credit score is one of the first things a lending institution will look at. If your credit score is weak, then give yourself some time to raise the credit score. Be prompt on your credit card payments and try to pay some of it down if you can.
Know the Value Of Your Home
Lending institutions also look at the value of your home. Pay a professional appraiser to determine the value of the property. Lenders use this value to arrive at a maximum figure they can lend you. Have this done so that you can borrow the amount you think you need.
Know Your Gross Monthly Income
Your monthly income is another crucial factor in determining your eligibility. Debt servicing should not exceed the more than 36 per cent of your gross income, so if you are paying off a lot of debts right now, then hold off from securing another loan until you have paid off some of that debt.
Evaluate Your Options
Although the bank may be one of the first institutions people approach for a loan, it may not be your only option. Think carefully about the places you can go to finance your project. Also, have a clear idea of the estimated cost of the project. When you can give clear figures, it is easier to persuade a lender to finance your project.
Talk With A Mortgage Broker
It’s always a good idea to get professional help. Mortgage brokers have a good idea who the best lenders are and can negotiate on your behalf for the best deal.
It is important to be in a strong financial condition to successfully refinance your home. You don’t want to be paying a high price for refurbishing your home, so explore all your options and gather as much information as you can. Our experts can help you make a good decision; give us a call today or send us an email. We will be happy to provide you with a free consultation.