Can you get a loan to improve and add to your mortgage?

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The site is funded by a private party, not a bank or mortgage co. Can you get a home equity loan to fix it? Or a home improvement loan? although there is a lien on the property?

  1. Reply
    Cynthia M
    January 23, 2011 at 2:28 am

    you can its just a refinance on the potential value of your home BUT good luck finding a lender who will do it considering the credit crunch

  2. Reply
    January 23, 2011 at 3:06 am

    Yes, you can…I’ve thought about it off & on, as well. – But, we just bought our home 3 yrs. ago (27 to go till pay-off), and adding more $ to the “total”, especially considering the amount of interest we’d be paying on the improvement/s) over that time, doesn’t seem justified…And, can you afford the increase of your monthly mortgage?

    You might consider a 2nd mortgage for the home imp., and be able to pay that seperately (in shorter amount of time)…Of course, it all depends on your personal circumstances, so why not call your mortg. lender and see what your options are?

    Happy remodeling, to you! 🙂

  3. Reply
    January 23, 2011 at 3:37 am

    Yes, its a refinance. The basic gist is they will use the value of the home after the improvements and base the loan on that.
    For example lets say your house appraises for 200K right now and after the improvements it appraises for 250K.
    You would get about 95% or so of the 250K to do the improvements.
    Let me know if you need more info.

  4. Reply
    January 23, 2011 at 4:14 am

    The home improvement loan provides many benefits. For example, when one takes a home improvement loan to upgrade a home and to get it in the shape, one can take a tax deduction.

    Store card interest rates can be as high as 25-30%. Credit cards offer rates of around 15-18%. So these borrowings must be planned with proper care. Personal loans can be another option if it is difficult to plan credit card borrowings.

  5. Reply
    January 23, 2011 at 4:41 am

    Yes, usually. It’s called a second mortgage.

  6. Reply
    DJ B
    January 23, 2011 at 5:19 am

    It may be discovered and the loan company wants to be assured they’ll get paid before others. So it may depend on that lien.

  7. Reply
    January 23, 2011 at 5:30 am

    It would depend on how much equity you have, and what the lien is and how much it’s for.

  8. Reply
    Thomas2Sell, Realtor
    January 23, 2011 at 6:01 am

    Yes. The mortgage company will want to get the home appraised to make sure it is worth how much you are trying to take from it. But as long as you have enough it should not be a problem. You can either keep your current mortgage and also get a second mortgage for however much you are looking to get. You also have the option of refinancing and paying off the original lien and receiving the rest of the money from the loan payed out to you so that you can use it for home improvements.

  9. Reply
    Mary B
    January 23, 2011 at 6:09 am

    Yes. Since it’s held by a private party instead of a independent financial institution, they lender providing the HELOC will want to see a copy of the recorded note (so they can have the terms of the loan), and they will want to see 12 months of cancelled checks for payment history verification.

    If you don’t have cancelled checks, you are out of luck with a HELOC. They are not making exceptions to this anymore.

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