what type of loan could I apply for to repair or reconstuct my home?

Question

I inherted a 6 bdrm 1bath + 2 - 1/2 bath 3 story house that needs alot of work oh and no mortgage.

Answer 1

OK First off a home equity line of credit (HELOC) is almost always based on prime rate. Where is prime rate now? 8.25% If you receive only prime + 0%, you are now over 8%! If you want a 30 year fixed rate mortgage, you are in the low 6’s now. So you tell me, what is better, a rate that adjusts with the fed who is all over the place now or a rate that can never change on you? So in regards to rate, do not go HELOC.



The reason you are being told HELOC is correct, assuming you are only going to pull out and use what you need. But let me ask, do you think you are really going to be paying off this principal that you borrow anytime soon? No. You will end up holding this, maybe extending your line, and eventually refinance it into a regular mortgage where your rate is not adjustable with the fed funds rate. By the way, prime went from 4% to 8.25% in about 2 years. They say its done going up for now but take a look at the PPI index that came out yesterday, inflation is still around.



I would talk to a mortgage broker or a bank but do not think you have to go local. Most banks are limited in the products they offer and typically require higher credit scores and maybe income verification. You should also think that if you are taking over a certain amount, say $50,000, what type of loan to get if not a HELOC. Remember you do get all the cash at once but if you lock in a lower rate. You can just get an interest only loan, either fixed or adjustable, and your payments will stay low. You can take enough extra to make your payments with for the next few years also. Just know this: YOU have a ton of equity in your home, do not be afraid to use it.

Answer 2

Equity line of credit. Think of it like a credit card. You only pay interest on what you use- not the limit. If there are any construction sights in your area, go up to the workers (Mexicans) and ask if they do side jobs. They will charge you according to how you look, so dress down. If possible borrow a junker car. This will save you a lot of money. But be careful, don't pay them in advance. You buy the materials and only give them money for the days work (usually about $80 to $100). After they complete the work then pay the agreed rate. Don't rip them off- what goes around comes around. Good luck.

Answer 3

sometimes equity lines are difficult to get for one reason or the other, if this happens, go to a local small bank in your niebhorhood, it may even be a credit union. Smaller banks have thier own funds to lend out and don't have to go to a head office for approval. The branch manager will usually be the final decision maker. Dont try to go to a loan broker or a mortgage company, they can help you when the renovations are complete, because they have more guidelines to follow.

Answer 4

Apply for Home Improvement Loan - if not many companies offer those type of plan-say Kitchen improvement-it's offered by SEARS and many others.From the Bank getting loan you must have the security and some money for the legal fees.Banks are profit earner.They don't offer anything free of charges.Some times if you have a proper security for repayment-but if your credit rating is poor they will refuse to loan.

Answer 5

A home equity loan can be taken against the value of the house.

Answer 6

apply for an equity loan or a line of credit on your house.

Answer 7

equity loan or equity line of credit