I currently have a home loan and want to do major construction what can I do to just have one loan?

Question

I was told I need to get a constuction loan so that will be an addition to my current loan and I need help please advise

Let me elaborated a little I have a one family and adding 2floor's and renovating basement &1 floor.

Answer 1

Depending on how much you have paid off on your regular mortgage, you could get a Home Equity Loan.
How much money you get for a Home Equity Loan depends on the current value of your house. If you have lived in it a few years, and it has increased in value, then you may be in luck.
They take the total value and give you a percentage on a loan depending on how much you have already paid off.

Home Equity Loans allow you to draw money for so many years but then you have to start paying it off and you need to pay it off by so many years.
EX: 10 year draw -- I have 10 years to use the money but I must pay it all back within 15 years.
Problem: The interest gets confusing if you keep on drawing money here and there.
Interest paid on the loan is tax deductible.

Another way to do it, is to refinance your house (like buying it all over again) including what you need for construction purposes so you will only have one payment and that would be your mortgage.
EX: Your mortgage is at present time $100,000. You need another $25,000. so you would need to refinance for $125,000 and you can take the loan for 10, 15, 20, 25, or 30 years, so how many years is your present morgage.

If you figure out the total cost of your present mortgage and what you need, add it together, you can see what your monthly payments are using a mortgage calculator. You would need to know the interest rate also.
EX: 125K at 6% for 30 years.

Don't go with an ARM loan ever!
Usually a low teaser rate but then higher rates will kick in and your mortage will be much more expensive. Many people are losing their houses because of this. Beware.

In either case, they usually do send out an assessor to look at your house and revalue it and consider if you are worthy of the loan.

There are conditions and restrictions with construction loans so you need to find out all specific details before considering that type of loan.

Answer 2

The simplified version of the global financial crisis is due to people having house loans they could not pay back. A house loan without a deposit means you are in trouble from day 1. You will always be running to be in front. Ask yourself this. Why do you have no deposit? If you are living at home or are renting, you are better off than owning a house so you should be able to save money. Once you buy a house you have huge numbers of expenses and they can be overwhelming. Only 15 years ago in Australia most home loans were only up to 80% of the value. Any loans above that were called cocktail loans and you paid a higher interest rate due to the risk. Banks got greedy and started to loan more money and now the entire world is in trouble. Iceland is bankrupt. Yes, the whole country. My advice would be to go to the most strict bank you can find, the one who has the most rules. If they will offer you a loan, then your answer is yes. If they say no, consider yourself lucky. A first home owners grant may end up costing you more than 20 times that much in 5 years. A lot of people who have lost their home now received a first home owners grant. Get all the advice you can and good luck. The tragedy of losing a house is that you can lose a marriage and family as well.

Answer 3

There are several banks that offer renovation loans based off the value of the home after the completion of the renovation. Some don't even require a monthly payment until the renovation is complete which will greatly free up your monthly cash flow while you are renovating. I am licensed in all 50 states and would be happy to look into this for you.

Answer 4

Get an estimate on the cost of the "major construction" you plan to undertake.

Add that estimate onto your current mortgage principal balance.

If the resulting total is less than the current market value of the property, the simplest thing to do would be to refinance your current mortgage for that new total amount.

If the resulting total is more than the current market value, you'll either need to self-finance the repairs, or do them incrementally over several years with small home equity loans or a single HELOC (home equity line of credit).

Answer 5

Figure out the cost of construction, and add the amount to your present loan. Then you will have to refinance your home. If you can find a loan co. that will do this without fees you will save about 3,000 dollars or more. if you cant, it might be less expensive to just have 2 loans.

Answer 6

You can take a HELOC to pay for the construction (if you have sufficient equity) and then refinance the entire deal when completed. Bear in mind, however, that the value of your property may NOT increase dollar for dollar compared to the cost of your construction project. Hence, you may have difficulty in refinancing the entire package when completed if you are already close to a 100% LTV scenario.

Answer 7

refinancing may do it, but I don't know how much equity you have or how much money you will need.

I have never heard of a construction loan, Home Equity loans are used for home repairs but they are two different loans. I would call a loan company and ask them what would be best for you.

Answer 8

Get a home equity line of credit through your current lender...some lenders offer these for free through an automated appraisal, and require no fees.

Then, when you have your repairs completed, just refinance and roll them both into one loan.

If you get your HELOC from another lender, the fees will be higher if you go with your current lender.

Answer 9

You should refinance for a higher loan and use the extra amount for your construction

Answer 10

get a home equity loan.