Real estate renovation is something very desired by those who have lived in the same residence for a while, or bought a house that has already had an owner and needs some repairs. However, this costs money that, often, those who have just acquired a property do not have.
What few people know is that financing is for the purchase of the property, but also for its retirement. The facility provides the chance to give a makeover to the desired environment, and the best: with a capital that will have low interest rates. See below for more information about the practice.
How it works
Financial institutions that work with this financing for real estate renovation allow you to cover up to 100% of the value corresponding to the work, charging lower rates than a common personal loan. The facility extends to both residential and commercial properties.
As in any negotiation of this type, it is necessary to meet some requirements made by the institutions, such as proof of income and that the contractor is the owner of the property. It is also necessary that the applicant does not have any other financing or more properties in the region where he will live.
Another important detail: the money for financing for real estate renovation can only be used for this purpose. Banks usually provide the amount contracted for the loan on a card, which can only be used in certain stores.
The advantages of financing
Applying for credit for property renovation has several advantages, including the certainty that you will have enough capital to complete it and even for unforeseen events that may arise. Here are three main advantages offered by the loan.
Residential renovation takes time, money and unforeseen events. Because of this, it is natural that they end up exceeding the planned budget and, sometimes, lack of money to complete them. As the financing is released as the work takes place, the owner of the property is sure that he will not suffer from this discomfort.
To make the business even more interesting, refinancing your own home or apartment can help you get even more credit — and all in one go. Thus, it is possible to plan what will be done, as well as get discounts with service providers by offering cash payments, for example.
interest and deadlines
The terms and interest of a home renovation financing end up being more advantageous than in the case of a common loan. There is a good variation between financial institutions, but in general the value ends up being between 2% and 4% per month — even higher than, for example, real estate financing .
Because of this, many consumers who seek this facility choose to face easy-to-pay financing installments for a certain period instead of spending the entire economy renovating the house. This gives the applicant better financial control.
Keep a financial reserve
Acquiring financing for real estate renovation ends up helping in maintenance and financial control. Depending on what changes are planned for the home, the works can end up costing the property owner a very high amount of money.
So, even with funding up to date, try to set aside money for emergencies of any kind. That way, in case something unforeseen happens, you don’t commit even more to expenses outside the plans and can keep up to date.
I got the funding. And now?
Once approved, it is essential to contain anxiety and carry out price research among the stores associated with the bank that offered the financing. So, you can do more with less and still add items to the real estate renovation to make the process even better.
When budgeting for a renovation with professionals, try to have at least three options. Take into account not only the price, but also the time frame and other people’s recommendations. After all, the phrase “cheap is expensive” makes a lot of sense at this time.
Plan the financing contract
Hiring a loan or personal loan involves a high amount of money, in addition to interest – no matter how small. Therefore, pay attention to the amount and value of installments, study your budget so that, later, the facility does not become a nightmare.
In addition, it is important to analyze the proposal of more than one financial institution. As much as renovation financing for real estate offers exclusive and attractive rates, it is possible to find other more interesting lines of credit, with advantages ranging from even lower interest rates to the amounts released.