Homeowners with cash may choose to pay for their remodeling projects from savings or investments. But many clients borrow money to fund their remodeling dreams. APEX works closely with Senior Mortgage Consultant Gail Vinje from AMEC Home Loans to satisfy its clients’ remodel financing needs.
“We trust Gail. She is a fellow NARI MN member who has specialized in remodel financing for the past 25 years and knows this business very well,” said APEX President John Biancini. “She has built a team of appraisers and title company agents who truly understand remodeling process, quality and investment value.”
Home equity loan vs. mortgage refinance
Vinje said obtaining a home equity loan can make sense for small remodeling projects on homes with high equity. Interest rates generally are higher for these second mortgages because of their second lien position. But there is no need to determine the value of the enhancements to qualify for the loan. However, she said it often is better to refinance and roll remodeling costs into a fixed rate 1st mortgage for large projects.
When one refinances to include remodeling costs in the mortgage, appraisers must determine the value of the remodel before it is built. This generally requires the contractor to provide plans and a scope of work to be done.
Remodeler’s role in securing financing
“Someone who wants to borrow based on future equity will need plans and a budget for appraisers to determine the future value. If they qualify for a program based on their current equity position, they might not need anything from the contractor,” Vinje explained.
Vinje said it typically takes four to six weeks for AMEC to process remodel financing for an APEX client. “Rates are good now, but it’s not possible to predict where they will be a year from now. I would say the timing is right when it is right for the client,” she said.
Quality of life improvements delayed are dividends lost
Biancini reminds clients that APEX remodels homes to improve their quality of life. “Remodeling is an investment that pays dividends of enjoyment for many years, so it makes sense to pay for the benefits over time,” he observed. “The one thing you cannot replace is time. The sooner your remodeling dream takes shape, the more time you and your family will have to enjoy it.”
If it helps, focus on the difference in your monthly mortgage payment rather than on the total project cost. But don’t over improve your property for the neighborhood unless you plan to own it and enjoy it for many years.
To begin your financing discussion, contact John Biancini.