Important Things to Know Before Taking Out a Home Renovation Loan

Home renovation loans can make your ideas come to life. However, it can be difficult to know when it is best to take out a loan versus using cash. Though you should always talk to a mortgage professional before deciding to take out a home renovation loan, let’s go over what some popular home renovations cost and considerations about using a home renovation loan to cover them. 

1. Garage Doors

Garage doors are a critical part of improving curb appeal when renovating a home.

New Garage Door Cost

The cost of a new garage door depends on location, size, and design; however, homeowners can expect to pay anywhere from $800-$1500 for a standard two-car garage door. Custom garage doors will obviously cost more but are a great statement feature to the outside of a home.

Home Renovation Loan

According to Chuck Waltman of garage additions contractor in Houston, since the cost of a new garage door is on the lower end of the spectrum when it comes to renovations, it might not be advisable to take out a home renovation loan just for the cost of the garage door. However, including the garage door with other larger renovations and taking out a loan could be an option if you didn’t have the cash flow for a new garage door.

 

2. Home Siding

Home siding can take a beating with the elements over the years. Proper maintenance can help prevent damage, though sometimes it still needs to be replaced.

Home Siding Cost

Home siding costs anywhere from $2-$7 per square foot. That adds up on a home, especially on two-story homes. Metal lap siding is about $5-$10 per square foot but is a nice addition to a home as it is far more durable than vinyl. No matter which home siding you choose, it is bound to be a nice addition to the outside of your home.

Home Renovation Loan

Since home siding can cost upwards of $10,000, for a larger siding project, a home renovation loan could be a viable option. To update the entire exterior of the home, you could take out a home renovation loan to cover both the new garage door and the siding to make it worth it.

 

3. New Roof

A new roof is one of the best updates that you can do to a home. However, it is also one of the most expensive.

Roofing Costs

A new roof typically costs $10,000 for the average homeowner for the most basic materials. Upgraded materials like metal, wood, or clay will cost even more.

Home Renovation Loan

Home renovation loans are common with roofs because it is a project that requires a lot of upfront money. It is not a renovation that can be done over time and therefore many people take out home renovation loans to replace the roof.

 

4. Interior Projects

Interior projects can be both small and large. From upgrading your interior door materials to redoing sheetrock and the layout of the home, interior projects range in difficulty and price.

Interior Project Costs

Interior projects can range from a couple of hundred dollars for a new sink to more than $40,000 on a brand new elaborate kitchen. The cost varies widely based on material selection, labor costs, and how extensive the project is.

Home Renovation Loan

Homeowners frequently take out home renovation loans for interior projects that are more extensive due to the increased costs. For smaller projects or renovations that can be done over time, using cash is more common.

 

 

Things To Know About Home Renovation Loans

Here are some quick things to know about home renovation loans.

  1. There are usually two different types— personal loans and home equity loans. Personal loans typically require a good credit score and proof of income, while home equity loans often are based on the amount of equity that you have in your home.
  2. More money isn’t always better. You should only take out the amount of money that you need since you will be paying interest on that amount. Additionally, paying interest on a small loan might not be worth it, so always weigh out exactly what you need and if it is possible to do without a loan.
  3. Consider the qualifications. Before making plans for home renovation using a loan, ensure that you qualify for them. The best way to do this is to talk to a loan professional.
  4. If you don’t qualify for a home renovation loan, research other options!

 

Ready to Talk to a Mortgage Pro?

If you are considering taking out a home renovation loan, talk to a mortgage professional who can help you see if you qualify and discuss your options. Contact The Texas Mortgage Pros today to get started!

Brian Jeffries is the content director for the Innovative Building Materials blog and a content writer for the building materials industry. He is focused on helping fellow homeowners, contractors, and architects discover materials and methods of construction that save money, improve energy efficiency, and increase property value.

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