Financing a home improvement project raises a lot of questions. There are several different types of home improvement loans available. How do you know which one is right for you?
Here are some of the common home improvement loan FAQs our home lending team receives. For help deciding which financing product is right for you, get in touch with our friendly loan originators.
How do I know if I’m eligible for a home improvement loan?
Eligibility requirements for home improvement loan products vary. Most home improvement loans have credit score and income requirements. Some programs have restrictions on the types of projects you can fund with a loan. 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, home equity line of credit, or other loan product.
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 640 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.
What does HELOC stand for and is it always a second mortgage?
A HELOC (home equity line of credit) is a mortgage against your primary residence. The loan is revolving and allows you to readvance the funds as you pay them down. This type of loan can be a first or second mortgage. If you fund your home improvement project with a HELOC, the line of credit will have its own interest rate and monthly payment plan. If you do a second mortgage HELOC, you will have these payments in addition to your first mortgage loan payments. Our lending team can help you understand if a HELOC is the best option for you and your project.
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.
I own a duplex. Am I eligible for a 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.
I’ve already started my home improvement project. Can I still get funding?
A Minnesota Fix Up Fund loan can be used to finance eligible projects already underway or completed within 120 days. Our lenders can help you determine if this program is a good fit for your needs. Don’t see your question listed here? Give our team a call! We are happy to help you understand your financing options. Get in touch today.