Taking Out a Home Improvement Loan to Pay for Renovation Projects

Real estate agent handing keys with mortgage form

A house that you can call your own is part of the American Dream. The road towards home ownership is rocky, though. With the national average sales price of new houses reaching $377,200 in September, the American Dream might remain just a dream for many Americans.

Buying a fixer-upper home is a good compromise for many people. In fact, over half of the respondents surveyed by HomeAdvisor said they’d consider a fixer-upper home if they move out of their current residences. These kinds of homes cost less than new houses, sometimes even counting the renovation costs.

Finding the Right Loan Program

There are several home renovation loan options available. More often than not, they are more economical than taking out two mortgages or a home equity line of credit. You can use your mortgage to finance a minor or major home renovation project. Another option is to roll the cost of buying the house into the cost of renovating provided that the improvements add significant value to the property.

Academy Mortgage Arizona recommends the Federal Housing Administration (FHA) 203(k) and the Fannie Mae HomeStyle® Renovation Loans. These two options are both government-backed and have the lowest minimum required down payment (3.5 percent and 5 percent, respectively).

The FHA 203(k) and the Fannie Mae Homestyle loans also have a minimum credit score of 620. This makes the two loans feasible options for most people, even millennials with a poor credit history and several student loan debts.

Homeowners and homebuyers can take out either of the two loans. Take note, though, that the FHA 203(k) only applies for owner-occupied primary residences while the Fannie Mae Homestyle loan applies to both primary and secondary homes.

Pros and Cons of a Home Renovation Loan

Couple applying for loan

The biggest benefit that home renovation loans offer is the low down payment needed. You’ll also be able to combine your home purchase and improvement projects in one loan. It provides instant use of the equity of your new home. You can borrow the amount your home would appraise for after the remodeling.

One drawback of taking out a home renovation loan is that you have to have a licensed contractor already picked out in advance. You need to have your renovation plans approved before getting your home appraised. You must also follow a strict schedule for the renovations.

Renovations that Add the Most Value

Apart from the necessary repairs to your home, prioritize outdoor remodeling projects for a higher return on your investment. Garage door replacements have the highest payback with 98.3 percent of costs recouped.

Manufactured stone veneer house sidings, wood deck additions, and window replacements are other outdoor home improvement projects that drive resale value. For indoor renovations, kitchen and bathroom remodeling recoup the most costs.

Financing a home remodel is more doable buying a newly constructed house. Thoroughly explore all your options first to make an informed choice. The right home renovation loan and careful planning of your home improvement projects put the American Dream within closer reach.

The Common Regrets After Buying a Home

Conventional wisdom says that buying a house should give you nothing, but excitement and a sense of accomplishment. While this is true in most cases, there are also those who felt fear and uneasiness during and after the process. This is because they keep wondering if they have made the right choice. After all, you would not really know until problems start popping up as you live in your own abode.

Homebuyer’s remorse is common, with more than half of buyers having regrets about some aspects of their purchase. It could be the neighborhood (which turns out to be noisy at certain times of the day), the size of the house (which is smaller than you expected for your growing family), or the absence of a bigger yard (which you later realized because you recently got a dog).

Buyer’s remorse can be a bit alarming if you are thinking of buying a house. Fortunately, it is possible to avoid that by knowing where the most common regrets spring from.

Not So Happy With the House

One of the main reasons for remorse is having a home of the wrong size, preferably too small. Some get so focused on the neighborhood that they fail to branch out and miss good deals in other real estate markets. This is why it is important to be flexible in terms of location to find the right home with the rooms and features you need.

Buying More Than What They Can Afford

Buyers who think that they have found the right house get too excited, causing them to make uncalculated moves like paying more than the asking price to outbid other buyers. This spells financial disaster later on, especially if you buy more than what you can afford. Altius Mortgage and other mortgage lenders in Salt Lake City suggest setting a budget and getting a preapproval first before going house hunting.

Not Saving Enough/Paying a Bigger Down Payment

Couple arguing about house payment

Many homebuyers made little down payment, but wished they had paid more initially. This is because putting too little money down comes with higher rates and private mortgage insurance (PMI), which adds to the monthly payment. This is why you may want to pay at least 20% to get lower rates and monthly payment, as well as avoid PMI.

Problems With the Neighborhood

Some buyers find themselves easily persuaded by the appearance of the home, failing to assess the quality of the neighborhood. It is important to find a home with all space and features you need, but you also need to get a feel of the neighborhood. It is best to walk around it first or talk to your potential neighbors. You might also want to check the nearby amenities and access to transportation, especially if you do not have a car.

These are just some the aspects of the home purchase that many buyers regret. You can avoid remorse later on by doing your homework and making sure that you are financially and emotionally ready for homeownership. You can also get in touch with a reliable lender to learn more about your loan options.

Organizing a Motivational Speaking Engagement Made Easy

Photo of a conference focused on its audience

Whether it is a team-building event or a small informal gathering, planning a motivational speaking engagement can be a bit tricky if you are quite clueless about how to proceed. You do not want to organize this kind of event that will end up ineffective or useless. On top of that, there are certain requirements that you will need to look into to make sure that the event will be pulled off.

If you are having some second thoughts or you find the whole endeavor quite challenging, there are some tips and tricks that you can rely on. Also, you can always hire an event coordinator if you feel like you cannot do it all by yourself. It is best to make sure that your event will not have any issues. Still, whether you are going to do it by yourself or let an event coordinator do the job, here are some of the helpful pointers you should take into consideration when planning your event:

Get a good speaker

Since it is a motivational speaking engagement, it pays that you pick the right speaker. He or she will be the anchor of the event. The speaker should be credible and reputable; you can even pick an athlete endorsed by Athlete Speakers. That should not be difficult, knowing that there are some agencies and companies that allow you to book athlete signings. You can be picky about the agency or company that will book an athlete signing since your event is a very important one. You should also pick a speaker who has much experience to share with the audience. That way, you will not have to worry whether the speaker can leave a good impression on the audience or whether the speaker’s talk is engaging enough for the audience to listen.

Pick a nice venue

Speaker at a conferenceYour event should take place in a good venue. It should accommodate the number of your attendees. More importantly, make sure that they can easily access your location. If it is a team-building event, it will always be nice to get away from the city. Beaches and retreat houses make good locations for such an endeavor. The most important thing is that you have to find out if it will be easy for your attendees to get to the venue and go home afterwards. This is important because some attendees might not turn up just because they cannot get to the venue conveniently.

Outline the program

The program of the event should be outlined properly. This means that you should come up with a schedule for each activity. Make sure that the schedule includes reflection and introspection. You should also come up with an assessment phase to gauge how the event has gone. Let your event coordinator—that is if you hire one to do the job—make the schedule of activities.

These are only some of the things you should keep in mind when organizing a motivational speaking engagement. Again, to make things fluid and streamlined, consider getting an event planner.

Bound: Types of Bail

When you’ve been arrested for a crime you may or may not have committed, you’re usually held in jail until your court date or until you’re released on bail. Bail is the amount of money that you have to pay in exchange for your release.

Bail is set by the judge during a bail hearing. During that hearing, the judge considers the following factors when deciding whether to grant bail and what amount is appropriate:

  • Your mental and physical condition
  • Your financial resources
  • Any familial ties
  • If you have a history of drug and alcohol abuse
  • If you have any criminal history
  • Any previous record of appearing at court proceedings
  • Your residence in the community

Types of Bail

There are five main types of bail available. The folks at amistadbailbonds.com have helpfully listed them down.

Cash Bail

Cash bail is when the accused pays the full amount of bail in cash or checks. As long as the payer has enough money to cover the full amount of the bail, the accused will be released from police custody. If you show up to all of your court proceedings, you may even get back a majority of your bail money at the end of the case, regardless of the outcome.

Surety Bond

This can be used for any amount of bail. Also known as a bail bond, this type of bail is provided on the accused’s behalf by a bail bond agent. This type of bail is very useful if the accused cannot afford to pay their own bail.

With a surety bond, the bail bond agent posts the accused’s bond in order to release them from jail. The bond agent usually charges a non-refundable fee of 12% and 15% of the bond amount to cover the risk of the accused not appearing in court.

Bail Bonds and the advantages

Release on Own Personal Recognizance

Personal recognizance bail is when a judge decides to release the accused on their own recognizance, making them responsible for showing up at their court dates. They don’t have to pay any bail. This type of setup is usually only allowed if the accused’s charge involves a minor, nonviolent crime and if the accused isn’t considered a flight risk or a danger to anyone else.

Property Bond

A property bond or secured bond is a type of bail in which the accused gives the court a security interest in property that is equal to the worth of the total bail amount. If the accused fails to appear in court, the court can seize the property that they used as bail.

Signature Bond

Also known as an unsecured bond, a signature bond is issued after the court has held a bail hearing but does not require the accused to pay the bail amount to be released. Instead of paying cash, the accused must sign an agreement that states that they must appear at all court proceedings, or else surrender the whole bail amount.

No matter what type of bail is granted to you, you must show up to all of your scheduled court proceedings as part of your release. If you show up to all of them and are found innocent, then the bail amount will be returned. If you don’t, you may be arrested and you will have to forfeit the bail amount. To avoid any jail time, make sure that you show up to all court-appointed proceedings.

What Renovation Loan Should You Get for Your Fixer-upper?

Couple applying for a renovation loan

If you watch house flipping TV shows, you might have considered buying and working on a fixer-upper. They’re more affordable than “move-in ready” homes, and there’s room to design them according to your desires. They’re also great for first-time buyers because house prices are finally going down. The universal message of house flipping shows is that the homeowners have better control over the renovation work and can attain the look they want.

The same goes with the financing behind it. Homeowners have better control over renovation expenses. Academy Mortgage Arizona says that getting a renovation loan is a great way to manage costs by having one payment each month for both mortgage and renovation.

There are many renovation loans available to aspiring home flippers, but the best for fixer-uppers, in terms of the amount of loan, are the government-insured FHA 203(k) loan, also known as the FHA Construction Loan, and the government-sponsored Fannie Mae Homestyle® Renovation loan. Both mortgage products base the loan amount on your home’s complete value after renovation. These loans differ from Home Equity Loans and Home Equity Line of Credit (HELOC), which lend according to the current value of your property.

Here are details about the two mortgage loans.

FHA 203(k) Loan

FHA loan paper with pen, glasses and money

This loan covers the purchase and renovation of a home for people with credit scores of at least 580. You also need to qualify for standard FHA loan requirements and pay a minimum down payment of 3.5%.  This loan has two types.

The first is the Limited 203(k) mortgage (also known as 203k Streamline), which has these features and scope of work:

  • It can finance work that costs up to $35,000.
  • There is no minimum loan balance required.
  • Due to its low cost, this mortgage is best for minor projects such as bathroom and kitchen remodels.
  • You must complete work within six months.

The second is the Standard 203(k) mortgage, which has the following features and scope of work:

  • It can finance almost any kind of renovation as you can borrow up to 110% of the estimated completed value of your house.
  • There is a minimum loan balance of $5,000
  • Since it allows you to create major alterations, the FHA requires you to hire a 203(k) consultant to look at the work you plan to do. This is to make sure that work will be completed within 12 months.
  • The mortgage is great if you’re going to make structural alterations to your home.
  • You can reconstruct a demolished home using this loan as long as the original foundation is still there.

Apart from the requirements above, you need to pay the standard FHA mortgage insurance of 1.75% of your full loan upfront and 0.85% per year. This loan discourages DIY work as it requires you to hire licensed contractors to do the renovation.

Fannie Mae HomeStyle® Renovation Loan

This loan allows you to borrow for the purchase and remodeling work of your property, up to 75% of the total value after renovation.

  • The loan amount may cover the architect, contractor, and inspection costs, the contingency reserve of 10% for extra expenses during construction, and the minimum down payment of 5%.
  • This mortgage allows you to make any kind of renovation to your home.
  • This is also great if you want to DIY. HomeStyle® Renovation allows borrowers to help with the refurbishment at the lender’s discretion.
  • The work must not exceed 10% of the value of the completed property.

The type of renovation loan that’s right for your fixer-upper relies on the amount of work that needs to be done. If you find one that requires only minor upgrades, such as adding a room or a bathroom, the Limited 203(k) mortgage is your best choice. This is because you require a low budget for flipping the house and your loan may get approved faster.

For bigger projects such as structural alterations and reconstruction, consider getting the Standard 203(k) or the Fannie Mae HomeStyle® Renovation. They provide higher loan amounts than what you’d get from a Limited 203(k).

Once you’ve decided on the type of loan, take your time to plan and prepare for the renovation proper. Work with your contractor and consultants to achieve your dream design. The best thing about a fixer-upper is that you can truly make it your own.