Have you been thinking of buying a home, but you’re concerned that your credit status wouldn’t be good enough to garner financial help? Or do you have ideas about how to improve the one you’re in, but you’d need a little help to make them happen? Maybe you need to make some updates to prepare for a rough winter or hurricane season. Either way, your ideal solution could be getting a loan. Below, you’ll find some scenarios that illustrate when to get a home loan.
Starting Out
In a perfect world, you’d have plenty of time and money to save up for a house. But the reality is that most people purchase their homes with a mortgage, which is a type of loan. It can take more than a month to get a mortgage, so waiting until you find a good house is not when to get a home loan. There are several steps involved, so you might want to apply early with the help of realtors. First, there’s pre-approval, then home inspection, and then the actual loan approval, which includes a credit check. Once you do get a realtor on your team, they can help pinpoint the best opportunities for you and ensure that you’ll be in comfortable financial shape as you proceed with the purchase of your dream home.
Your ability to get a loan with a good rate depends on your credit score. If you’re not sure what your score is, you can check with your bank or with one of the three credit agencies — Equifax, Experian, and TransUnion. There are ways to build up your credit if it looks to be subpar, or if you simply don’t have enough history to raise a score. You can make regular payments on credit cards and ensure your other bills are on time. Those credit reports can help you determine if you have outstanding debt. Then, once you obtain the mortgage, your regular payments will also help build up your credit score. That means you’ll eventually get better rates if you should need another loan or if you want to refinance in the future.
If you are considering moving into a neighborhood that’s considered a historical landmark, check with the local government for loans and other resources — given the preservation requirements for such homeowners, there tend to be programs to support them. Loans are also available on the state and federal level if you happen to be a first-time buyer or are moving into a challenging area that has development potential.
There are many other places to look for a loan for a home. For instance, if you’re an active duty member of the U.S. military, a veteran, or a family member of a veteran, you might be eligible for generous home loans from the Department of Veterans Administration.
In addition, the property you’re interested in must pass certain standards in order for you to qualify — and it must be your primary residence.
The federal government’s Department of Agriculture also offers aid to first-time buyers, and it doesn’t have to be a farm you’d like to purchase, either. These properties are rural, however. There are a few requirements to take part — the ability to make a monthly payment calculated based on your monthly income.
A little-known program is known as “Good Neighbor Next Door.” If you happen to be a first responder, teacher, or police officer, you might be able to get 50 percent discounts on the home you’d like to purchase, as long as you’re willing to commit to staying there for at least three years. To take advantage of this offer, you’ll have to act fast, as the properties are usually available for only a week.
If you check in with the Department of Housing and Development, they offer rare houses that can be purchased for a dollar. The Dollar Homes program applies to single-family homes that are foreclosures. The program is mainly open to low-income families.
As you can see, there are various factors that can help as you ponder when to get a home loan, so don’t miss out on any of them.
Credit unions can also offer opportunities for first-time home buyers. Your place of employment may have one, so be sure to check.
Which Loan Will Work for Me?
There are several options available for almost any situation involving when to get a home loan.
Personal loans are one option. There are a lot fewer restrictions involved with these, as they aren’t tied to your home equity. This is a good option if your credit score is exemplary and you have a good income. You’ll also have the freedom to choose your contractors with no restrictions.
Government assisted loans are available, namely the Fannie Mae HomeStyle Loan. If you have a lot of work that needs to be done, this can be a possibility. There are various requirements that need to be met. For one thing, the contractor doing the work has to be on an approved list in order to get the loan, which can cover up to 75 percent of the work needed to be done. The funding for these loans can be used for any project.
In addition, the Federal Housing Association’s 203(k) loan is ideal for those with a lower credit score requirement. For this loan, there is a minimum of $5,000 of renovations required to be made, and with the loan comes a consultant that also serves as a project manager.
There’s also the home equity loans and home equity lines of credit types of loans. For the home equity variety, which is like a second mortgage in that you would receive a lump sum that isn’t subject to various interest rates. A home equity line of credit is best for someone with a bigger home improvement project because you can plan your payments. These loans have an element of risk involved because your home is held as collateral, so that if you miss payments, the lender can take possession of your home.
There are options for loans that aren’t even necessarily linked to home improvement. You can even get a loan if you need to move suddenly for work. Hiring distance movers is covered under certain personal loans — just be sure to save your receipts so you can be reimbursed for your expenditures during the trip.
Adding Value
If you already own a home, you might be thinking about making home improvements. This isn’t a unique idea — the average homeowner sets aside more than $10,000 on home updates and renovations. There are changes that you can make on your own if you want to tackle a do-it-yourself project. But if your goals are a bit more lofty, then that’s when to get a home loan. For example, one popular project idea for new homeowners is a new roof installation. If you’ve purchased a fixer-upper or an older home, it might be time for a roof replacement — most roofs last for an average of 20 years. Many people opt for metal, asphalt, or slate for their roof. But if you’re thinking about energy efficiency, solar panels can also save money in the long run. Either way, this is the type of project that might require a bit of financial help.
Another issue you might encounter would be crumbly sidewalks on or around your property. This can occur due to age and weathering, or sometimes, even poor workmanship. This is another project that can get pricey and that’s a good time to think about when to get a home loan. Hiring an experienced driveway asphalt paving company can help ensure your funding goes a long way.
It’s fairly common for older homes to have issues around insulation. This can go far beyond feeling an occasional draft when you pass a window — that air you feel is money escaping. When you have issues with insulation, that means you’re paying more to retain heat into your home. That can add up. So it’s a good idea to consult with a heating service company who can not only upgrade your system for maximum cost-effectiveness, but they can also help you understand where your leaks are coming from.
It might be necessary to upgrade the outer walls of your home to keep heat and air inside, too. Some might decide on using concrete, brick, or even aluminum siding for reinforcement.
For homes with a garage, your doors can be another place where air escapes, along with the money you pay in heating and cooling bills. This is an opportunity to upgrade your doors, and for that, you’ll want to consult with an eco-friendly garage door service.
Investing in the exterior of your home can be a good hint about when to get a home loan. Starting out with a home that needs a lot of love, especially when it comes to landscaping, means that making upgrades can get expensive. An expert can help you make the best use of your space, using the best plants, shrubs, and trees. In addition, you can also consider using fences, stone walls, and gravel to make your front and back yards stand out.
For this, working with a hardscaping service is your best bet. Hardscapers can also help with structures such as retaining walls.
When you’re considering a major addition to your home, such as an additional room or a garage — something that is guaranteed to be worth the investment — now, this is when to get a home loan. One of the determining factors, when potential buyers are on the hunt, is additional square footage. Anything that can be used for extra living space is an asset.
Sometimes, if the overall square footage of a lot allows, you can look to expand even more to add an in-law suite to your property or even a pool or jacuzzi. These costs can be covered by a loan.
If your home project is a foreclosure that has been exposed to the elements for a time, there’s a chance it has been infiltrated by rodents. Getting rid of this problem can be pricey, and this can be an unlikely situation for when to get a home loan. But in extreme cases, obtaining pest management services who can get the job done right is well worth it.
Storms on the Horizon
In many cases, if your home sustains damage during a natural disaster and other storms, you can secure a property adjuster who can help provide estimates and help determine how much an insurance company should pay for losses.
The Small Business Association offers loans for such losses that aren’t covered by insurance. If you have trouble getting credit or have heavy damage, the SBA offers levels of support that fits your circumstance.
You may also find state assistance for homes affected by natural disasters.
- Even before you face property damage, there is financial help available to reinforce your home. Along with resealing windows, reinforcing storm doors, and taking another look at your roof, you can also use a loan to dramatically trim or cut down weak or older trees that are more likely to collapse during a storm. If your trees get tangled up in power lines, you might reach out to the local power company for help in trimming your branches.
If a fire attacks your home, you can, of course, reach out to your insurer, but also be aware that many states also offer assistance for those trying to rebuild.
Another thing to check for in this turbulent time is to determine whether your mortgage or loan payments are suspended as a result of the disaster. This can offer a respite as you try to navigate repair costs.
Conclusion
When to get a home loan is one of the major questions you might face as a homeowner. Regardless of the circumstances you face, there is likely an avenue available to get a home loan that will help you improve the value of your home. Don’t forget to check in with local, state, and federal government resources to see what you’re eligible for.
