Financing

Evercraft Remodeling Financing Options

We have an established working relationship with the following financial institutions and can recommend them.  If you decide to work with either of these companies, we can help you navigate the loan application process. 

Renee Quintana

303-639-2579

ReneeQ@Canvas.org

 

our financing recommendations

If you’d like to finance your home improvement project, Evercraft Remodeling recommends that you use the Equity you built in your house.  When the value in your house increases, the equity in your house also increases.  You can use this equity to take on projects that you may not have been able to do before.  This is probably the most common way US residents finance home renovation projects.  Your bank will likely help you with this process, but be sure to do your research.  Different banks can offer different finance packages, but it all begins with a simple phone call and telling your bank that you want to finance a home improvement project using the equity in your home.

 

general requirements

1. A Good FICO Score:  In order to get a good rate, you will need to have good credit — generally 670 or above.  So, if your credit falls below that and you are planning on applying for a Home Equity Line of Credit at some point in the future, you may want to work on increasing your credit score.  If you don’t know your credit score, you can ask your bank or use an online service.  Just note that you are entitled to a free report annually, so you do NOT need to pay to get your credit score.

2. A Debt to Income Ratio around 43% or Less.  You will need to prove your income by sharing W-2s, 1099s, pay stubs, or other forms that prove your income.  Your bank will also want to know how much you sped o things like your mortgage, student loans, auto loans, and any other regular monthly expenditures.

3. Your Bank may require you to maintain 20% equity in your to get the loan and may ask you to get a new appraisal.

 

rates

Generally speaking, your interest rate will be higher than what you got when you applied for your original mortgage.  However, it will almost assuredly be lower than any interest rate you’d get if you got a personal unsecured loan.

 

There are Three General Types of Loans

1. Home Equity Line of Credit (HELOC):  A HELOC works like a credit card, where your credit limit lies somewhere between 60% and 85% of the value of your home.  Since HELOCs have adjustable rates, this is only recommended if you feel that you can pay off the debt quickly.

2. Home Equity Loan:  A home equity loan is one that you pay in installments and can be repaid over many years (anywhere from 5 to 30 years). There is a fixed interest rate and a monthly repayment schedule and therefore are often referred to as second mortgages.

3. Cash-out refinancing:  Simply said, you replace your current mortgage with a new, larger one. You refinance your existing mortgage and the lender gives you the rest as cash.

 

benefits to you

If you use the money from the Line of Credit or Loan to improve your home, you may be able to deduct interest payments from your taxes.

 

risks

Like your first mortgage, a HELOC is secured by your home.  This means that if you fail to make the payments your bank can foreclose or force you to sell your home.

 

What are Unsecured Loans?

Many contractors offer unsecured loans, but these are built in a way that will benefit the contractor, not you.  The contractors are typically partnering with banks and selling the loans to customers on behalf of the bank.  This means that the interest rate offered will most likely be higher than if you used the equity in your house.  And although you may see advertising for 0% financing, repayment is usually required to be completed in 1-3 years, much quicker than using the equity in your house.

 

Renee Quintana

303-639-2579

ReneeQ@Canvas.org

 

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