When it comes to Albuquerque property repair and renovation, the garage is often the most overlooked part of the house. Most people do not realize its potential as a living space or storage area.
As Home Advisor reports, converting or remodeling a garage can cost as much as USD$23,000 depending on its scope. In addition to permit costs and materials needed, the cost of your garage will depend on several other factors. Further, if you need to add other utilities like heating, cooling, insulation, etc., you should expect to spend more.
As the project is relatively expensive, homeowners may have to seek other sources of funding. Here are some traditional and non-traditional options you should consider when remodeling your garage.
Home Equity Line Of Credit (HELOC)
Essentially, this works like a credit card where you’re given a specific amount by the lender, typically 90% of the appraised value of your home, less any existing mortgage payments.
You must be a current mortgage borrower to be eligible for this loan product. It is more likely that you’ll be approved if you’ve made active payments up to this point.
Even though this might be helpful, keep in mind that your interest rates may be higher than the ones on your mortgage. On the other hand, you can borrow as much or as little as you need for your project.
Personal Loan
There are usually a wide variety of personal loan products available. There’s a chance you can get one to finish your garage renovation. Documentation and eligibility requirements must be met before you can utilize this option. You need to agree to repay the principal amount and interest rates as well as other charges over the specified time frame before your loan amount can be released.
Home Equity Loan
If you’re converting your garage into an accessory dwelling unit (ADU), repairs or remodeling might cost a fortune. For those who are unfamiliar with this term, an ADU is an additional living space on a property. In addition to housing additional family members, you can rent this extra room to generate income. You can add an additional room to your home by building an addition or a small building apart from the main house.
Home equity loans are intended for large-scale home remodeling projects. The term is similar to the term HELOC, which was discussed previously. This type of loan differs from a credit line in that the amount is enclosed in a lump sum instead of a credit line.
Other Secured Loans
When you want to borrow a large sum of money and don’t have a stellar credit score, a bank or other lender will ask you for collateral. Known as a secured loan, this type of loan requires the borrower to use an asset as collateral. A home or vehicle may serve as collateral.
This may be a good option for you if you have valuable assets you can use for collateral. The solution is attractive to borrowers who don’t qualify for other types of loans.
Government-Backed Loans
Home improvement loans are available from government-backed lenders such as the Federal National Mortgage Association (Fannie Mae) and the Federal Housing Authority (FHA).
With these types of financing, borrowers are able to extend credit for the purpose of buying a home, remodeling a property, transforming a garage, and constructing another living space, all with one loan. Borrowers with an interest in buying a home can use this program to renovate their garages as soon as possible after they buy the property.
No matter how you proceed, a garage renovation project incurs significant costs. Consider all your options carefully before deciding to borrow money. Decide which option is most appropriate for your needs.
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