Loans for House Purchase and Renovation
Home loans are loans dedicated to the costs necessary for your home: from renovations to the purchase of furniture, from maintenance to the installation of solar panels. With home loans it is possible to obtain the amount necessary to cover the entire amount to be spent, without the need to mortgage the property.
When the amount needed is low, usually less than around $ 50,000, the loan is a worthy alternative to a mortgage. This type of financing is suitable for those looking for a low-cost property, or if they already have a large part of the necessary sum. Since the loan procedure is lean and fast, home loans are suitable for those who have a certain urgency to receive money.
Home loans are divided into:
- personal loans, allow you to manage the liquidity obtained with the utmost freedom, without giving any proof of expense to the bank;
- finalized loans are taken out at the retailer. The sum disbursed will therefore be used exclusively for the purchase of a specific asset.
The types of home loans
Home loans can be used for different types of purchases and interventions:
- restructuring loans;
- loans for furniture and furnishings;
- loans for the purchase of boxes and small properties;
- energy and photovoltaic requalification.
Among the main purposes of home loans is the renovation of buildings: to carry out major works and restorations in your home, a personal loan can be the right solution to obtain liquidity without turning on a mortgage. The restructuring loans allow to obtain up to $ 60,000, without having to provide a specific reason: the sums thus obtained can be used for renovation works carried out by professionals, as well as for smaller works carried out personally.
Loans for furniture and furnishings
Home loans can be aimed at purchasing furniture and renovating furniture. Through a loan for furniture and furnishings it is possible to face small or large expenses, ranging from the purchase of a single piece of furniture, or an appliance, to the complete renovation of the home furnishings.
Home loans for the purchase of boxes and small properties
Home loans, which have a maximum amount of $ 60, can also be requested for the purchase of boxes, cellars and other appliances in the home, or to buy a small property. It is a valid alternative for those who already have a mortgage in place, or do not want to mortgage their home.
Energy requalification and loans for photovoltaics
The category of home loans also includes loans aimed at energy requalification or the purchase of photovoltaic systems. Many banks and financial institutions offer subsidized loans for works aimed at saving energy.
In addition to taking advantage of special discounts, once the loan has been repaid, savings are guaranteed by the greater efficiency of your home, which will allow you to reduce energy costs.
Home loan or mortgage: which one to choose?
Home loans, in the event that they are aimed at renovations or the purchase of boxes and small properties, can represent a valid alternative to a mortgage. The choice of financing depends on the type of intervention and on its cost.
Let’s see advantages and limitations of both solutions:
- home loans can be requested for a maximum of approximately $ 60,000, do not provide for the registration of a mortgage on the property, have lower costs and can be obtained faster. However, the interest rate applied on a loan is generally higher than that of a mortgage; in case of requests for high sums, the bank could also demand particular guarantees, such as the guarantee or the signature of a co-obligor;
- the mortgage, provides for a lower interest rate, involves numerous additional expenses (such as notary fees) and is disbursed in longer times. This solution can be indicated for amounts higher than $ 30-40,000, which allow to amortize the costs.
The evaluation criteria of the home loan
Here is a short list of some evaluation criteria for the home loan:
- risk policies: each Institute applies its own risk policy in assessing requests, based on the statistical data in its possession;
- income level: the acceptance of requests is normally also subject to the appraisal of the applicant ‘s level of income and the relationship between the latter and any repayment installment;
- credit reliability: the Institutes estimate the level of risk associated with each request, also on the basis of the indications transmitted by the Risk Centers.
If the credit history of the applicant is not linear since some delays have been recorded in the repayments of previous loans, the probability of receiving the home loan is lower. In some cases, a valid alternative is constituted by the Transfer of the fifth: this solution, offering the appropriate guarantees to the lender, allows to adopt more flexible evaluation criteria.