Tag Archives: Home Improvement

Tara Mortgage Services Featured Blog: “Getting a Home Improvement Loan: Scenario by Scenario”

DHREA 01/05/2019
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(Every week we feature a blog from one of our fantastic affiliates, Tara Mortgage Services!)

Home improvement loans can be used for minor upgrades or major repairs or even complete remodels. Everything from replacing old plumbing to making your home more energy efficient are great reasons to consider a home improvement loan. With much better rates than a credit card and more options for repayment, homeowners just like you are discovering how easy it is to make those necessary home improvements.

Speaking of options, you have quite a few and there are some that are better than others depending on the situation.

For a clearer picture of which home improvement loan is right for you, please contact Tara Mortgage Services!

Home Improvement Loans by Scenario

Little or No Equity Scenarios

If you’re doing minor repairs: An unsecured loan would be your only option. An unsecured loan means that your home is not used as collateral. Since you have little to no equity AND the repairs would not increase the value of your property, there is essentially nothing to use as collateral.

While not the best scenario to be in, we understand that there are circumstances that require getting a home improvement loan. Despite having a higher interest rate than other home loans, it’s often a more attractive option than putting it on a credit card.

If you’re doing major repairs remodeling: A few options in this scenario. If your current mortgage rate is low, consider a second mortgage. In this case, you keep your current low-interest home loan. However, if your current home loan has a higher rate than what is now available to you, refinancing your loan under a renovation loan or a cash-out refi would be the way to go.

In the latter scenario, we would need an itemized repair and remodel plan so that we could better assess the “after-improvements value” of your home. Both of the loans mentioned above have lower interest rates than an unsecured home loan, but remember to still include closing costs.

Significant Amount of Equity Scenario

If you’re doing minor updates: Consider getting an unsecured loan or even a line of credit if you’re in this situation. With a loan this small, it’s often better to use the option that has low or no closing costs. Another benefit of a home equity line of credit (HELOC) is that you can reuse it if needed.

If you have major updates or remodeling: In this scenario, you’re eligible for several different home improvement loans. A HELOC, a second mortgage, or a cash-out refinance are ones to consider. Ultimately, what will determine the best option is your particular financial situation or the desired goal. For example, if you want to keep your current interest rate, get a HELOC or second mortgage.

While they have higher interest rates on these, you’ll save on closing costs. However, if you prefer cash flow or can lower your interest rate on your first mortgage, look into a cash-out refinance.

We’ve outlined the basic situations for choosing the right home improvement loans, but there are many more factors to consider. Contact Tara Mortgage Services today for a no-obligation consultation with a mortgage professional.  We look forward to helping you!

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#TaraMTG Tuesday! Most Popular Ways to Finance Home Improvements

DHREA 27/11/2018

(Every Tuesday we feature a blog from one of our fantastic affiliates, Tara Mortgage Services!)

 

Saving for making improvements to your home is often the least expensive route, but it’s not always possible. Thankfully, you have other options for financing! Our business is in home loans, so you might already guess, that’s the option we recommend, but you don’t have to take our word for it.

Read about all your home improvement financing options –from traditional home improvement loans to peer-to-peer loans to cash out refinancing –and decide which is best for you!

Traditional Home Improvement Loans

These loans are financed by banks, credit unions, and a few online lenders. You’ll get a lump sum to pay for all the labor and materials for your home improvements, such as replacing your HVAC system or putting in a new pool.

Though the name implies that it’s a home loan, it’s not –at least not in the typical sense of the term. It doesn’t consider your home equity nor does it require your home as collateral.

A home improvement loan is unsecured so you can expect a higher rate than you would with a secured loan.

Personal Line of Credit

This loan is also an unsecured loan and is collateral-free. You can use the lump sum however you wish. You can upgrade your home and set some money aside for a vacation too. Or maybe pay down some debt. They are funded reasonably fast and don’t require any equity in your home either.

However, a word of caution: the repayment period is usually shorter. This means that your monthly payment will likely be high. If you cannot afford to make high monthly payments, a personal line of credit may not be for you.

Peer-to-Peer Loan

These loans are funded by a group of investors rather than a bank or the government (we’ll talk about government loans below). They go by different names, and you may have even received a flyer in the mail from these non-traditional lenders.

On the upside, these loans are also funded quickly, and you can use the money however you want. The downside, however, is that these loans have some of the highest interest rates out there.

Home Equity Loans

Home equity loans and home equity lines of credit (HELOCs) have longer repayment periods with lower interest rates than the above-mentioned loans. That means your monthly payments will be small and more of the payment will go toward the principle.

Another big bonus is that the interest is tax deductible!

The biggest risk to this loan comes with defaulting. If you’re unable to repay the loan, you put your home at risk for foreclosure.

A home equity loan lets you borrow a lump sum, while a HELOC acts more like a line of credit.

With a HELOC, you have a “draw period” during which you can withdraw money. During this time, you only have to repay interest so your initial monthly payments will be quite low. When that draw period ends, your payments will then also include the principle. A HELOC typically has a variable interest rate, so your monthly payment could still be low even after the draw period ends, but it may also increase significantly.

If you prefer a fixed rate, then you’ll want to look at interest rates of a home equity loan or ask about our fixed-rate HELOCs.

Cash-Out Refinance

A cash-out refinance replaces your current mortgage with a new one, but this time you’ll borrow extra money to finance your home improvements. Borrowing more money means it will take longer to pay off your home, however, your new home loan may have a lower rate than your current one.

This option often requires you to have about 20% equity as well as meeting all the typical requirement of a home loan such as employment and good credit score.

FHA Title I Property Improvement Loans

If your equity isn’t high enough for a cash-out refi, consider an FHA Title I loan. This government-funded loan is for specific home improvements such as energy conservation. They cannot be used for “luxury improvements” such as swimming pools or outdoor patios. This loan caps at $25,000 with a 20-year repayment period. These loans are not widely available, so you’ll want to contact us to see if you qualify.

Want to know precisely how low your payment can be to fund your home improvement? Contact Tara Mortgage Services today! Use their digital home loan application and upload your docs securely in between shopping for floor tile and a new kitchen countertop!

 

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Carnegie, PA
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When is a permit needed for a remodel or home improvement? Read below!

DHREA 12/09/2018

permit

When it’s time to remodel or make improvements to your home, you may wonder whether you need a permit. For many projects, having a permit from the city government is crucial because the changes to your home go on record with the city, and it ensures inspectors will check for any red flags.

For example, if you rewire your home incorrectly, there could be exposed wires, potential for short circuiting and electrocution. This could lead to extensive repairs like wiring your home again, which could cost hundreds to thousands of dollars. Also, when you try to sell or refinance your home, buyers and lenders want to know that your remodels comply with building codes, so you need to have proof via the permits from the city.

How do you determine which remodels and renovations require permits? Most contractors will know ahead of time, but it’s good for a homeowner to be aware and avoid fraud or future repairs. The general rule of thumb is that structural, electrical, plumbing or mechanical work will require a permit, but here’s more information:

Remodeling with a Permit

When speaking with a general contractor about permits, here are some projects that will always require one or more:

  • Fencing Installation or Repair:  When you install or repair a fence, it’s important to check with your city to see if there is a height restriction. Some cities and even suburbs have certain heights that fences can’t go past. Be sure to have a fencing contractor check about such restrictions to avoid having to cut the fence or take it down after installation.
  • Window Installations:  When you install new windows that are bigger than your old windows, a permit is required to cut holes for them. This will also include cutting holes for skylights and new doors with windows, so a window professional will need to acquire those permits.
  • Plumbing and Electrical Work:  When installing or replacing plumbing, you will most likely need a permit. The same rule applies when installing or replacing electrical wiring, whether it’s an outlet, switch, ceiling fan or overhead lighting. The cases where you won’t need a permit include smaller projects like repairs and light fixture installations.
  • Structural Changes:  When you make any kind of structural changes to your home, the contractor will need to get a permit. This may include changes to the load-bearing walls, balconies, decks, porches, roofs or foundation flooring.
  • Heating Maintenance:  If you replace the water heater, the heating contractor you’ve hired to do the work will need to get a permit. Changes to the ventilation system, gas and wood fireplaces and ducts will also require a permit. This does not include filter changes, motor lubrication or equipment cleaning.
  • Additions and Remodels:  Additions, new construction, remodels, repairs, replacements, upgrades and any other additions and remodeling projects totaling $5,000 or more will require a permit. This will include detached structures like garages, sheds and platforms. Exceptions to this rule include construction that’s less than 200 square feet, as well as painting, carpeting and wallpaper.

Renovating Without a Permit

There will be some projects that won’t require a permit ahead of time, like small plumbing and electrical projects. Other projects you can do without a permit include:

  • Painting and wallpapering
  • Installing flooring like hardwood, carpeting, linoleum or vinyl tile
  • Minor electrical repairs
  • Installing new countertops
  • Installing or replacing a faucet
  • Landscaping work

Trust in the Pros

If you aren’t certain whether or not you need a permit, you should hire a professional. A pro will have the background and experience to determine if your project is extensive enough to require an inspector to check for any red flags afterward. Professionals will usually be the ones to acquire the permit, so they also know what kind of paperwork to fill out and the type of permit to obtain. Relying on a professional will allow your project to be completed in a timely manner.

 

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MACE Property Management: www.PittsburghPropertyManagement.com

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#TaraMTG Tuesdays: The Secret to Renovating with a VA Loan

DHREA 14/08/2018

(Every Tuesday we feature a blog from one of our fantastic affiliates, Tara Mortgage Services!)

Did you know that there’s a VA loan specifically for home renovations? It’s true! With a VA Renovation Loan, you can use up to $35,000 to pay for home improvements. Also called a VA Rehab Loan, this an additional loan you would get at the time of purchase.

Wondering where that $35,000 amount comes from? The 35k is just about 25% of the total entitlement that veterans receive with a VA loan.

How does a VA Renovation Loan work?

A VA Renovation Loan is a second loan and is technically separate from your home loan. However, both loans will be lumped together so that you’ll have only one mortgage rate and one monthly mortgage payment.

How To Use a VA Renovation Loan

The goal of a VA Renovation Loan is to bring the home up to VA Home Loan standards. So while it won’t allow for a whole kitchen makeover, you can still do some major improvements.

You can use it to repair or replace the flooring. You can fix electrical systems, improve the plumbing, and even make some energy efficiency upgrades! However, if you’re looking to do a complete kitchen remodel, with new cabinets and maybe adding a center island with a granite countertop, you’ll need a different VA loan product for that.

Remodeling with a VA Cash-Out Refinance

With a VA Cash-Out Refinance, you can cash-out on your total equity. For example, if you have $33,000 in equity in your home, you can take out the entire $33,000. You could also choose to take out just a portion, say $20,000, to fund your kitchen remodel.

What’s more, if you plan it right, you could increase the value of your home with the remodel!

A VA Cash-Out isn’t limited to just home improvements either. You can use it for anything from buying a new car to taking a family vacation. Here’s another perk: you may be able to reduce your mortgage rate too!

Imagine being able to take out cash to remodel a bathroom, while increasing the value of your home, and still pay less per month on your mortgage! Of course, there’s no guarantee that all three of these perks will happen all at once, but with a VA Cash-Out Refinance, it’s not out of the question.

There are many more benefits awarded to current and retired military personnel, and their spouses through VA loans. Lower than average interest rates, zero downpayment options, and no mortgage insurance premiums are but a few. And when you combine it with a VA Renovation or Cash-Out Refinance, the advantages add up even more!

Not a veteran? We got you covered. Contact Tara Mortgage Services to learn more about special loan programs for first-time homebuyers, less-than-perfect-credit homebuyers, and investors too!

 

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Carnegie, PA
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Learn investing from a local expert with a vast amount of experience in the Pittsburgh market. Alex started investing in 1993. We will review hands on examples, analysis, and …

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Visit our affiliates!

MACE Property Management: www.PittsburghPropertyManagement.com

Tara Mortgage Services, LLC: www.Tara-MTG.net

HDH Settlement Services, LLC: www.HDHTitle.com

Burkhead Insurance Services: Burkhead.Insure

Bin There Dump That: www.PittsburghDumpsterRental.com

 

 

 

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Update Your Home Without Breaking The Bank

DHREA 02/05/2018

Tired of your home looking off-trend and out of touch? Or investing in an older home and want to update it? You don’t need deep pockets to do either. In fact, upgrading your home can be quite affordable with the right projects.

Here are five ways to make a big impact without spending a lot:

REPAINT

Paint trends come and go, so if your walls are still the same color or have the same wallpaper from 1950, they’re likely out of date. Consider giving the walls a new look with a more modern tone.

CHANGE LIGHT FIXTURES

It’s time to kick out-of-style light fixtures to the curb. Pendant lighting, Edison bulbs and simple recessed lighting are what’s hot with today’s designers and buyers.

UPDATE YOUR HARDWARE

You’d be surprised at how easily doorknobs, drawer pulls, locks and handles can start to look aged. Take a good look at your existing hardware, and consider upgrading to newer models. And don’t forget the hinges.

REFACE YOUR APPLIANCES

Have an old, yellowing appliance but don’t want to replace what’s not broken? Just use peel-and-stick stainless steel or marble contact paper, and reface those appliances instantly.

INSTALL A KICKPLATE

If you want to upgrade your curb appeal but can’t afford a new door, consider installing a kickplate. It’s an instant, affordable way to add visual appeal to any existing entryway.

These upgrades may seem minor, but when done properly, they can have a serious impact on your home’s aesthetic. If you’re considering more extensive updates, let’s get together to discuss ways to increase your home’s marketability and long-term value!

 

Visit our affiliates!

MACE Property Management: www.PittsburghPropertyManagement.com

Tara Mortgage Services, LLC: www.Tara-MTG.net

HDH Settlement Services, LLC: www.HDHTitle.com

Burkhead Insurance Services: Burkhead.Insure

Bin There Dump That: www.PittsburghDumpsterRental.com

 

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