Do You Qualify for a Florida Home Equity Loan? Know the Basics
Are you in the market for a Florida home equity loan? This can be a useful resource, but you need to be aware of what is required for it. For example, many interested aren’t sure if it’s possible to be approved for one before completing an addition on their home.
Dan Moore, Vice President of Product Management at LendingTree.com, has the answer …
Florida home equity loan information
If you have enough equity in your home to cover the Florida home loan you need, the state of your renovation project should not be a problem. You’re free to use the money from a Florida home equity loan for any purpose. Most lenders will lend you an amount equal to 100 percent of your home value - and some will even lend up to 125 percent if you have a good credit score.
If your renovation is only partially completed when you apply for the loan, however, this could cause difficulties in appraising the house to ascertain its value. This, in turn, could affect the amount of money you’re able to borrow. Some Florida home loan lenders offer home improvement loans that allow you to receive the money in stages during the renovation process, based on inspections. This could help solve your problem, although these loans may be hard to find.
Refinance your Florida home loan
Another option is to refinance your initial Florida home loan for a higher amount; then take a cash-out payment to fund your renovation project. If your credit score is lower, you may be able to get more cash to pay for your renovation by refinancing your first mortgage versus adding a home equity loan.
When considering this approach, you need to weigh the benefits of getting more cash out versus the change in your total monthly payments and interest rate on your refinance. This is usually worthwhile only if current mortgage rates are close to the rate you have now.
You may still be able to get a home improvement loan if you don’t have enough equity to borrow all the money you need via a Florida home equity loan. It depends on your credit score.
However, you may pay a higher interest rate. You may also be able to get enough funds to make up the difference through a personal loan or line of credit. These Florida home loans also carry a higher interest rate since they are not secured by your home, and the interest payments are not tax-deductible, like the interest on a home equity loan (consult a tax adviser about your particular situation). However, the set-up fees are usually lower.
Overall? Consider a Florida home equity loan. Don’t feel overwhelmed by all these details. Just apply through our site today and learn more.
