If you’re planning a home improvement project this year, but you’re not sure where to look for financing, Lake Region Bank can help! We offer several different loan options and can help you determine which one is the right fit for you. Here’s a look at a few of the home improvement loan FAQs we hear most often from our customers.
What should I consider when it’s time to choose a home improvement loan?
The Lake Region Bank lending team can help you understand all of your options. Generally, you want to review the total loan costs (which may include closing costs or fees depending on the product you choose), interest rates, equity requirements, and any available tax benefits (speak with your tax advisor for help with tax-related questions).
How do I know if I’m eligible for a home improvement loan?
Most home improvement loans have credit score and income requirements. However, these requirements vary by product. One of our friendly home loan officers can help you understand if you are eligible for a Minnesota Fix Up Fund loan, cash-out refinance, home improvement loan, or home equity line of credit. Visit our home improvement loan webpage to learn more.
I’ve already started on my home improvement project. Can I still get funding?
Yes. A Minnesota Fix Up Fund loan can be used to finance eligible projects already underway or that were completed within 120 days. Our lenders can help you determine if this program is a good fit for your needs.
What are some of the home improvement projects a Fix Up Fund loan can pay for?
Minnesota Fix Up Fund loans can help you purchase a variety of home improvements, including bathroom, kitchen, and basement remodels; windows, siding, and roofing repairs and replacements; the addition of porches, patios, and decks; garage updates; mold and radon mitigation; landscaping and tree removal; and driveway repair and replacement. In addition to these improvement projects, certain energy efficiency improvements and accessibility improvements are also eligible.
I own a duplex. Am I eligible for the Minnesota Fix Up Fund loan?
Yes! Single-family homes, duplexes, triplexes, and fourplexes are all eligible under the Minnesota Fix Up Fund program. However, you must occupy at least one of the units of your property, as the fund requires owner occupancy.
What’s the minimum credit score for a home improvement loan?
Every home improvement loan product has a different minimum credit score. While requirements vary, many loans require at least a 620 credit score. Some may require a higher score, while others may accept a lower one. Our friendly, expert team can help you understand your options.
How is a cash-out refinance different from a traditional refinance?
In a traditional refinance, you replace your existing mortgage to get a better interest rate or term on your loan without borrowing additional cash. In a cash-out refinance, you replace your existing mortgage and borrow extra funds you can use to make improvements to your home or on other projects.
Is a cash-out refinance a second mortgage?
No, a cash-out refinance is not a second mortgage. A cash-out refinance is a refinance of your current mortgage. Choosing this option will rewrite your current loan, changing its terms and adjusting the payment to reflect the new loan amount and interest rate. Our home loan team can help you understand if this is the right option for you.
What’s the difference between a HELOC and a home equity loan?
A HELOC is an open line of credit that you can draw from when you need it, up to a certain amount. A home equity loan is a lump-sum loan that has a fixed repayment schedule and interest rate.
Is a HELOC a second mortgage?
Yes, a home equity line of credit is a second mortgage on your home. If you fund your home improvement project with a HELOC, the line of credit will have its own interest rate and monthly payment plan. Payments you make toward your HELOC are in addition to any mortgage loan you already pay. Our lending team can help you understand if a HELOC is the best option for you and your project.
Ready to get started on the financing for your home improvement project? Reach out to your friendly, local home loan experts at Lake Region Bank today!
