A very important part of any home improvement or remodeling process is your plan to handle the cost.  Most of the customers we work with don't have a stash of cash on hand to pay for it, so that means some sort of financing.  In a recent post we discussed some specifics for qualifying for a particular type of loan, the home improvement loan. Many banks and other entities offer these types of loans, but it's not the only way to pay for your project.

If a home improvement loan is not for you, there are other financing options for getting cash to fund a project and make it happen.Here are a few to be aware of.

Home Equity Loan: This type of loan is sometimes referred to as a second mortgage.  It is a bit harder to get because it is much like closing on your home again. You have to go through the same mortgage process, have an appraisal done, pay closing costs and any fees and then close on a second mortgage. This is a process, but it is one that provides cash for those that need it.  However, if you work with your original mortgage lender, the process may be easier, especially if you are quite a ways into your mortgage and you have built up a substantial amount of equity. Home Equity Line of Credit: Often referred to as a HELOC, this type of loan is like a secured credit card, where you're using the equity in your home as collateral.  It's similar to a home equity loan, except that you can use it again and again. Your lender will establish a cap amount based on the equity you have in your home, and as you pay it off, you are able to draw on that line of credit over and over again.  This can be a great way to go if you have multiple projects in mind for the future. This way you only have one application process and you're set. Home Construction Loans: Home construction loans are sometimes referred to as bridge loans. This type of loan is temporary financing that allows you to either build a home or put an addition on your home. Then once the project is completed and an appraised value can be determined, you'll need to pay it off, usually with a second mortgage.  These loans can be very restrictive, however, because the bank will require approval of your contractor as well as your building plans.  A list of costs for each part of the project has to be submitted to the lender, and as items are completed the lender will pay the contractor directly.  And much like they would for a mortgage to purchase a home, your lender will require a substantial down payment. FHA 203(k) Loans: These are government-issued loans that are used to help rehabilitate neighborhoods when the homes need a bit of TLC. The financing can be used to buy and then make improvements to a home, especially the exterior. These can be great ways to finance a project when a home may not be up to code or needs some substantial modernization. They are generally easier to get than bank-backed financing, and they come with a very low down payment option. So you see, if you're planning on doing something like replacing your roof or your siding soon, you have lots of ways to pay for it.  We've even got financing programs available that are tailored specifically for home improvements. Our goal is to make your Minnesota exterior home remodeling project as simple as possible.  We are a licensed Minnesota full-service remodeling contractor serving the greater Twin Cities area. Our specialty is metal roofing and siding.