Home additions are a common alternative to moving to a bigger property. The wonderful thing about additions is the ability to personalize and make sure it matches your specific needs. Learning home addition financing alternatives in Florida can be a huge help. Below are a few popular ones.
Unsecured loans are not specific to a home but the funds can be obtained for home additions. This is often the least favorable option because unsecured loans come with higher interest rates than home loans. Furthermore, interest on the loan may not be deductible come tax time. Many people use it as a transitional solution. Once additions are done, your home value will be much greater. This might empower you to then receive a home equity line or pursue refinancing an existing home loan. Those funds may then be used to eliminate unsecured loans.
Refinancing An Existing Home Loan
Refinancing an existing home loan allows you to pull out some equity without multiple loans. It can also be a helpful way to distribute your home addition costs over a longer timeframe and get a fixed interest rate. The amount of equity that you may access depends on the specific mortgage program and the market home value. One down side of this solution is the closing charges.
Home Equity Line
If your home value is much more than the balance on your loan, ask about a home equity line. Most banks will approve amounts up to approximately 80% of the current value of your home. A Home equity line offers low rates and low fees. Interest payments can be tax deductible (consult with an accountant to learn more). The payment period is normally shorter and interest rates might fluctuate.
Home Addition Financing Alternatives In Florida
Speak with an experienced lender for information on one or more of these options. Also, there are usually special home addition mortgages that you may be able to use. Regardless of which alternative you choose, keep in mind that your ongoing recurring home costs will be higher as a result. Prior to making a decision, understand what you can afford and what work is feasible with your price point. The information on home addition financing alternatives in Florida in this blog are meant just as a basic guideline.