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Real Estate Tips: Home Renovation Loans

By Karen Hoeve Published 05/23/2007 | Real Estate
Whether you have just purchased a home or have been living in it for years, there are likely one or two changes that you would like to make, yes? Most people will agree unless they are living in their ideal dream home, something that is hard to attain. But that is no reason why the home you are in should not become that dream home. When renovations are in order, then financing those renovations becomes a concern. So what are the options open to a typical home owner?

- Buck Up - Well if you can simply afford to pay cash for the renovations then this article will not have too much use for you. But congratulations on being able to pay the renos up front. Not too many people have the ability to do this.

- 2nd Mortgage - This is a very common kind of home loan also known as an equity loan. The 2nd mortgage is based on the equity that you have built up in your home. You are then able to borrow against that amount and pay it off monthly like a regular mortgage. Generally the interest rates on 2nd mortgages are quite attractive as the amount of the loan is secured by your equity.

- Home Owner's Line Of Credit - This is the other most commonly utilized home loan for renovations. Again this loan is dependant and secured by your home equity, but works more like a credit card in that you can borrow any amount up to your total equity. Again this kind of loan comes with a very agreeable interest rate as it is equity secured.

Renovations are always a good bet for increasing the value of your home. Renovating before selling your home can generate a positive buzz in the real estate community. Positive buzz is a highly sought-after thing in the home market as it draws buyers into your home. If you are merely renovating to improve your living space then you can be secure in the knowledge that you home is gaining value while improving your style of life.

Karen Hoeve is a professional realtor who specializes in the dynamic Raleigh real estate market. With over 20 years experience, Karen has dedicated her life to bringing families and homes together. For more information contact Karen today or visit www.yourraleigh.com.