Spring has officially sprung and the start of remodeling season is underway. While beginning a home remodel may seem like a daunting, expensive task, there are ways to ease the financial burden. There are several loan options to help with larger home improvement projects as well as cheaper choices to help freshen the look of the home on a budget.
Senior loan consultant Michael Thorpe of Mountain West Financial, Inc. explained some of the financial options, including a home equity line of credit (HELOC), cash out refinances and more.
HELOCs have recently been reintroduced into the marketplace and many allow use of up to 90 percent of the home’s value.
“A HELOC is a great way to finance home improvements for a few reasons,” said Thorpe. “One, it is a revolving line of credit so you are only charged interest on money that is taken out against the line and you may pay it down effectively creating a lower payment. Secondly, HELOCs have much lower closing costs associated with the origination of the line of credit.”
Another home remodel financing option is cash out refinances, which are easily accessible, according to Thorpe.
“My prediction is we will see a large increase in cash out refinances over 2014,” said Thorpe. “This is in part due to the large increases in home values allowing more home owners to access their home’s equity for renovations and/or debt consolidations.”
The FHA 203K is a loan that was specifically created for home renovations and is available in two options: remodels under and over $35,000.
For all of the above options, good credit (a minimum credit score of 600) and verified income are general requirements, although there are a few exceptions to this rule. There are many options for this available and Thorpe suggests contacting a mortgage professional to find the best option for the individual.
There are also options available for adding “green” improvements to your home, such as the Energy Efficient Mortgage (EEM) and Energy Improvement Mortgage (EIM).
“EEMs give borrowers the opportunity to finance cost-effective, energy-saving measures as part of a single mortgage and stretch debt-to-income qualifying ratios on loans thereby allowing borrowers to qualify for a larger loan amount and a better, more energy-efficient home,” explained Thorpe.
“EIMs allow borrowers to include the cost of energy-efficiency improvements to an existing home in the mortgage without increasing the down payment. EIMs allow the borrower to use the money saved in utility bills to finance energy improvements,” Thorpe continued.
Although there aren’t any specific financing loans available for upgrading to water saving landscape, also known as xeriscaping, a portion of the EEM and EIM can be used for landscape energy efficient upgrades.
Due to the lack of rainfall in San Diego County this winter, water conservation has taken on a whole new level of concern. Consider replacing grass lawns, which can be difficult to maintain and require constant watering, with a rock-based garden instead.
“Rock mulch requires quite a bit less maintenance, which translates into more free weekend hours and more time to relax,” said Michelle McLeod, owner of Southwest Boulder and Stone.
Further, the rocks and boulders complement desert plants, which naturally need less water. This environment-friendly option is gaining in popularity.
“There must be a balance and proportion between the living plants and the inert rock material,” said McLeod. “For a long time, a respectable garden meant an abundance of colorful flowers. In the past ten years, succulents have become very popular in part due to their low-water requirements but also to their tremendous variety and color.”
“An excellent backdrop to surround the succulent base is decorative rock because it acts as a graceful and delicate adjunct to their thicker fleshy leaves,” McLeod continued.
Incorporating rocks into your landscaping is simple and can be done in a variety of ways. Decomposed granite is a popular choice for pathways and driveways while decorative rock mulches are replacing grass yards. You can also add a backyard fire pit, build a rock wall or pave using sandstone.
In order to conserve water, many cities and counties are offering residents rebates to offset the cost of replacing turf.
“During the recent drought, we have definitely seen a spike in the number of people looking to conserve water by utilizing rock products and mulches,” said McLeod. “When you look at the snowfall levels in the sierras as well as the water levels in our lakes, it is reasonable to see why people are moving that way.”
Much of this work can be done with a pick-up truck, shovel and wheelbarrow but some of the larger jobs are better handled by a professional contractor. Although Southwest Boulder doesn’t specifically offer installation or design services, they can recommend qualified professionals to help.
If improving your outdoor living space isn’t on your to-do list this spring, perhaps you’re considering adding new touches to the indoors instead.
There are several ways to add new life to your home without breaking the bank, such as updating your home’s hardware. Two popular improvements, according to Bill Haynsworth of San Diego Hardware, are replacing exposed hinges and selecting new knobs for kitchen cupboards. The new European style hinges, which are hidden and can include a soft-close feature, instantly make a kitchen look more modern.
“Both of these projects can give your kitchen a relatively inexpensive facelift without the time and expense of a complete kitchen remodel,” said Haynsworth.
Another home improvement option that Haynsworth regularly sees requested by his customers are keypad entry locks for doors.
Not only does San Diego Hardware carry an extensive range of decorative and functional hardware for both indoors and out they have a spectacular kitchen and bathroom showroom where you are sure to find those plumbing fixtures and accessories to complement your individual style.
Whether you’re planning a simple weekend project to upgrade your home or a large-scale remodel, just remember that there are options to help make the process as simple and cost-effective as possible.
For more information contact:
Mountain West Financial, Inc.
619-354-0937 irvine.mwfinc.com/mthorpe
Southwest Boulder and Stone
619-331-3120
San Diego Hardware
858-576-1892
