To learn how to add Acorn Finance Portal to an Andriod Phone or Tablet home screen watch this video. For Google Chrome Browser Recorded on
Clink, clink, fizz, bang. Something is going on with your plumbing. When you don’t have enough cash on hand to cover important repairs, financing can be a life saver (or at least a basement flood saver). From roof fixes to front porch renovations, there are lots of repairs just can’t wait if you want to stay safe and dry at home.
House repair loans are the most common way to get your hands on the funds you need. But home repair grants may also be an option in some cases. If you’re worried about how you’ll pay for an emergency and/or much needed repair, here is the 101 to financing a home repair.
Can You Get a Loan to Fix Your House?
Most people have heard of refinancing or second mortgages. They may not realize there are specific loans out there just for completing repairs. Even better, some financing options could include grants and be targeted exclusively toward people in your area.
Financing Options for Home Repairs
OK, so financing for home loans exists. Knowing it’s out there is one thing. Wondering, “How can I get money to repair my house?” is another. Home repair financing comes in a variety of formats. Here are some of the most common avenues worth exploring:
Traditional Home Improvement Loans: Home improvement financing is typically unsecured. This means you might get an interest rate that’s slightly higher than a home loan. On the other hand, you don’t have to attach your property as collateral, which could be preferable when you’re happy with your current mortgage and don’t want to refinance. It’s also a reasonable option for people without a lot of equity. Check out credit unions and banks to see what they have to offer for people with your credit standing.
HELOC Financing: A Home Equity Line of Credit (HELOC) lets you tap into your home’s value. Because this type of loan is secured by your home, you can often score an incredible interest rate. Plus, your loan will have a long repayment period to keep payments low. With a HELOC, you can draw from it as needed -- so you may be able to rely on it for future repairs, too.
Peer-to-Peer Lending: If you’re unable to get approved through a bank or credit union, a peer-to-peer loan may be available to you. Several investors will pitch in to finance your home repair loan, but you still just have one monthly payment. Interest rates can be higher, but the repayment periods are shorter. If you can swing the payments -- you’ll be out of the debt in 3-5 years.
Government Loans and Grants: There are a number of options available to people who need repairs for safety and health. USDA Section 504 Home Repair grants, for instance, can help elderly and/or low-income people who are unable to obtain other types of credit to complete home repairs. Then there are local government loans. In St. Paul, MN, residence below a certain income can get a 4% interest loan for repairs including a new furnace or air-conditioning installation, roof replacement, and a new garage.
Homeowners Insurance Claim: Some costs will likely be covered by homeowners insurance -- don’t forget to check your policy! You could mitigate the amount of money you need to borrow for a roof repair or damaged siding by filing a claim with your insurance first.
What to Know About Rentals and Other Unconventional Situations
Getting approved for home repair loans when you’re not fixing your primary residence can get tricky. Banks and credit unions often won’t approve loans for investment properties because they perceive the risk of default to be higher -- if you lose your tenant and can’t find a new one, they assume you’ll stop paying back your loan. You can probably still find some funding, but you may want to turn to peer-to-peer lending or 0% interest credit cards rather than arguing with your bank.
Similarly, if you inherit a property that needs to be fixed before you can sell it, you may run into issues getting a conventional loan. If the loan is paid off when you inherit the home, it might be easy to get an equity loan. Grants, however, will be out of the question.
Most homeowners have some credit, so long as they’re on the mortgage. If you’re in the uncommon situation of not having enough credit established, though, it will also be a bit more challenging to find a loan. Stick with local credit unions or get a credit card for a few months and pay it on time to build up enough of a reputation (assuming your repair can wait). It may also be hard to get a home repair loan with bad credit. Peer-to-peer lending and grants are a good avenue to pursue when your credit score is low.
Finding a home repair loan can be overwhelming, but thankfully the Internet makes it easy to explore your lending choices. Check out the options from Acorn Finance today!