Why Now Is The Best Time For A Renovation Loan

[fa icon="calendar"] Apr 12, 2016 2:30:58 PM / by Eustis Mortgage

Eustis Mortgage

Do you have a home improvement project that you’ve had in your sights for a while, but something is holding you back — like the perception of a flat real estate market?

Well, there’s good news: growth in annual spending on home remodeling is expected to surge from 2.4 percent to 6.8 percent in the second quarter of 2016 according to Harvard’s Joint Center for Housing Studies. Confidence in the value of their homes has more and more homeowners gearing up for home improvements and repairs.

That new kitchen or new bathroom remodel offers one of the most sure-fire ways to increase value in your home, especially if you’re planning to sell in the next few years. The overall condition and appeal of kitchens and baths rank highly as key factors for determined appraised value, so upgrading now is a sound investment.

Thanks to the availability of renovation loans, financing complete kitchen and bathroom remodels is pretty straightforward — and low-interest rates mean you’re getting a lot of mileage out of every dollar lent while making your home exactly the way you want it. They’re typically used by first-time homebuyers to rehab properties, but they’re also very useful to current homeowners looking to make needed improvements to an existing home.

Signs of a rebounding housing market are strong, and while cash is cheap, homeowners are putting a lot of that money directly into renovations. Sure, you can do a cash-out refinance, but for lots of qualified borrowers who don’t want to extend the terms of their original mortgage or tap into equity for a line of credit, renovation loans are the answer.

Need a few more reasons to take advantage of those low-interest rates? Consider these statistics:

  • Spending in the repair and remodeling industries is expected to grow to $300.5 billion in 2016, mostly in the “smaller discretionary projects” category — namely kitchens and bathrooms.
  • Home price appreciation is estimated to hit 4.2 percent in 2016
  • For each 1 percent increase in real appreciation, average project size will likely see the same increases. More home value means more willingness to further invest through renovations.

Average small project spend per remodel is almost expected to increase by 1 percent.

Topics: homeownership, housing market, real estate market

Eustis Mortgage

Written by Eustis Mortgage

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