You may be wondering how much a home renovation costs compared to the amount you would make selling it. How do you stay on a budget when you're too eager to spend the little or no money you have to increase the value of your home?
You may find that the high cost of renovating your home can put you in a place where you should use a more sophisticated home loan. However, things may turn out to be more than you expected, more than the amount in your pocket.
You should first find out if you qualify for a construction loan to help offset some of the costs of your “home remodeling mortgage” (which is also known as hipoteca reforma vivienda in the Spanish language).
Mortgage companies require you to own your own property. This is to give the bank an opportunity to recover your investment or security if you fail to make a mortgage payment; Otherwise, you may have to pay a premium. You can then proceed with a 1-year loan plan to cover your renovation costs.
The good thing now is that you are not committing to the entire amount of the home loan. You only pay interest on the actual amount borrowed (each has a service charge) on each withdrawal, so you don't cover the entire mortgage until the end of your build.
However, you need cash to pay your contractors to keep them doing a good job, knowing that they won't be paid in full until the job is done. The best part is that you need to learn how to create a budget.
For now, these are the direct costs of remodeling your home with a home loan. Keep in mind that you also have the option to refund any money you haven't used. Remember to follow the rules – value but spend less. So you can sleep at night and maybe end up just enjoying the extras.