BOULDER, CO, Mar 29, 2024—You know you can finance (and re-finance) your home, but many homeowners in a repair pinch often wonder: can you finance home repairs?
The answer isn't quite so simple. According to the Millennial Housing Commission created by Congress, few lenders are willing to administer home improvement loans. Most prefer to make home-equity loans or unsecured consumer loans because they are easier to manage.
“Home improvement loans usually require inspections and irregular draws on the loan amount as work is completed, which forces regional or national lenders to find local partners to provide oversight,” says Phil Boren, Broker Associate of RE/MAX of Boulder, Inc..
Financing repairs and improvements with home equity is okay for most homeowners, but it’s difficult for many first-time buyers. They have lower incomes, smaller savings, and have made lower down payments on their homes than first-time buyers a decade ago. So they have little equity to borrow against. “Unfortunately, it is often lower-cost, older homes purchased by first-time buyers that need the most work,” explains Boren.
Unless you have a cash reserve, you will have to shop around for the best borrowing terms. In addition to the options listed above, Boren notes there are other routes you can take. “You can ask relatives for a loan,” says Boren. “Borrow against your whole life insurance policy. Refinance your existing mortgage. Get a second mortgage. Contact the government about home improvement programs. And, only as a last resort, borrow from a finance agency, which generally tends to charge higher rates.”
For more real estate information, please contact RE/MAX of Boulder, Inc. at philboren@gmail.com, 303-441-5647, or RE/MAX of Boulder, Inc..
Phil Boren is a 26-year veteran real estate Broker and Realtor, specializing in consulting with buyers and sellers in Boulder, CO and along the Front Range of Northern Colorado. Held Real Estate Broker's license in Texas, California and Colorado; Managing Broker for over 200 agents and Brokers for Century 21 and RE/MAX franchises. Award-winning Realtor with experience in management, sales, marketing, relocation, appraisal, REO, BPO's, foreclosures, short sales; previously held the MAI designation from the Appraisal Institute. Experienced in both residential and commercial real estate and achieved the No. 14 individual ranking in the 5-state, Mt. States Region for RE/MAX International in 2001, based on sales volume. Received my BSBA in Finance and Real Estate from the University of Arkansas in Fayetteville, where he was a 4-year starter and 4-year football letterman for Hall-of-Fame coach, Lou Holtz.