Category: Renovation Mortgage

How a HELOC Can Help You Become Your Own Boss

Michelle Huizinga is a hairdresser in West Michigan, but you won’t find her at a retail salon near a grocery store. Instead, Michelle, like many enterprising entrepreneurs, works from her own home. Through a room she renovated in her home, Michelle now sees her clients and her children with no travel time.

“I started working from home because I had two small children at home. It’s a great way to make extra money while being my own boss and still able to spend as much time as I want with my kids. I can be flexible. I don’t have to be busy one week, where a lot is going on in our family. Also it cuts down on childcare costs because my husband can watch the kids at night when I cut hair.”

How can I start an at-home business?

While the freedom of self-employment is enjoyable, there is one catch: it can cost several thousand dollars to renovate a room in a home to become a business, like a hair salon. Depending on the work done out of the home, the State of Michigan might also require certifications.

“We had to build the salon in the basement from scratch. We needed walls, plumbing, shampoo bowl, equipment.” Michelle estimates that, at the minimum, one could need about $5,000-10,000 to start such a salon.

How a HELOC Can Help

With a HELOC (Home Equity Line of Credit) loan from Riverbank Finance, you, too, could quickly become your own boss in your own home. The Line of Credit is great because it only charges interest on the money you borrow and use, just like a credit card. Traditionally, rates for a HELOC are lower than the average credit card rate, as well.

One other perk that can help a family save money is that, if a room in the home is used for a business, all the costs associated with said room can be written off on your taxes. So the electricity, water, and equipment used to make a hair salon in a basement can become a tax write-off and save you money as a homeowner.

If you have a skill set like hairdressing, accounting, or a number of any other skills that just require a single room to work in, you, too, could become your own boss, save on your taxes, and increase your family’s income. All it might take is an initial investment with a HELOC. To see if a HELOC is right to start your self-employment dreams, call one of our loan officers at (800) 555-2098 today.


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How a Refi Can Help You Care for Aging Parents

No one likes the idea of sending their parent away to a nursing home to be surrounded by strangers all day. But is there anything else that can be done? Maybe you want to have them live with you in a spare bedroom. But what about the cost of upgrading your home to meet their needs and disabilities? Some of the changes don’t come cheap! So if you haven’t saved up, what’s a caring child of aging parents to do?

One option you could explore is refinancing your mortgage to finance home improvements. A cash-out refinance would allow you to get a great deal of money for renovations to provide the best home environment for an aging loved one.

Cashout Refinance for Home Improvements

How easy is your home to navigate for an elderly person? Are there steps at the entrance? Are the railings easy to grasp? Can your entryways become slippery when wet?

If you want to upgrade your home so an older parent can live with you, consider these three important upgrades: mobility, dexterity, and hygiene.

Mobility. It’s important that steps become ramps, handrails are placed in key areas (like bathrooms), and things your parent needs the most are easily accessible. For example, it’s a good idea to have their bedroom close to a bathroom they can use. Hallways and doorways need to have proper and current lighting so they can see obstacles in their way. Stairways can be upgraded to have chair lifts to reduce the risk of falls.

Dexterity. This might seem trivial, but as we age, our hands aren’t what they used to be. Does the oven get stuck, or is the freezer hard to pull open? Does the coffee maker need to be upgraded to decrease the amount of steps your parent needs to make if they want a cup? Upgrading cabinets with more lazy susans or putting more pantry items at eye-level can increase their comfort.

Hygiene. Bathrooms can be a potential disaster when it comes to the elderly and the potential for falls. Including non-slip mats in and around a bathtub or shower, hand rails by the toilet, and curbed or walk-in/sitting tubs can reduce that risk. Keep in mind, removing your existing tub and purchasing a more elderly-friendly tub can be expensive.

Some of these renovations can add up to thousands of dollars or more, depending on how many changes your home needs. But who can put a price tag on keeping a family member at home, rather than at a care center? With that in mind, here are a couple of options: 

Cash-out refinance. You refinance your home for more than it’s worth, and the money you’ve put into the original mortgage is available to use as cash. This is a more advantageous option than a second mortgage, because you still only pay one loan and it often comes with a lower rate than a second mortgage.

Cashout Refinance Alternatives

Alternatives to doing a cashout refinance may be a Home Improvement loan or a Reverse Mortgage. These are unique loan options that can be used to finance the costs of home renovations.

HomeStyle Renovation Loans

Our HomeStyle Renovation Home improvement loan may be a great fit to allow you to finance the costs of home improvements into your mortgage. This program is a conventional home loan that is different from standard mortgages because it uses the future improved value.  The appraiser will prepare your home appraisal valuation based on similar homes that have sold with the amenities and improvements that you are planning. You can still avoid PMI if your loan-to-value is under 80% although this loan option allows up to 95% financing for primary residences.

Reverse Mortgage for Home Improvements

A reverse mortgage loan may be another great solution for the elderly to improve their home’s safety and accessibility. A reverse mortgage is a loan type that allows homeowners to access the equity in their home without having to make monthly principal and interest mortgage payments. At the closing they may be able to receive a lump some in proceeds which can be used to pay for home improvements.

If you are serious about upgrading your home, contact us at Riverbank Finance (800-555-2098) so we can help you find the best way to afford the renovations you need.

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Five Reasons to Buy a Home in the Winter

5 Reasons to Buy a Home in the Winter

Baby, its cold outside—and its only going to get colder. Before you put your home search on hold for the next four months, check out these benefits of buying a home in the winter!

1. Less Competition

During the winter months, there are less buyers shopping, and therefore less offers to compete with. While other buyers are traveling for the holidays, tying up year-end projects at work, or bundling up at home, you’ll get the jump on the next hot new listing. There’s also less of a chance you’ll get caught up in a bidding war, keeping your purchase price low.

2. See the Home at its Worst

During the warmer months, it may be more difficult to inspect certain essentials like HVAC and windows. You’ll get a better idea of how a house holds up when the weather is at its worst. Is the basement dry? Are the windows drafty? Are there frozen pipes? How often does the furnace run? These questions provide you the unique opportunity to see how a home tolerates Michigan’s worst weather.

Related: Include Renovation Costs in your Mortgage

3. Sellers are Motivated

Just as buyers are less likely to begin their house hunt in the winter, sellers are less likely to put their home on the market during the winter months. This means winter sellers fit into one of two categories: they’re trying to sell a property that didn’t sell during the peak real estate season, or they’re eager to sell quickly and didn’t care to wait until the Spring. Either way, winter sellers are more likely to negotiate terms such as closing costs, possession time, and most importantly— the sales price.

4. Get the VIP Treatment

Now, let me preface this by saying that any Realtor worth their weight will work hard for you no matter what time of year it is—but the truth is you’ll be receiving responses to your emails much faster in the winter months than you will come April. They’ll be juggling fewer clients in the cold and snow, and have more time on their hands to focus on finding you your dream home.

5. Get Settled Before Spring

I don’t know about you, but my spring and summers are busy. After a long Michigan winter cooped up inside, the last thing I want to do is waste my warm sunny weekends moving, unpacking, painting, or remodeling. Buying a home during the winter months allows you to finish off those first few projects before vacations, weddings, festivals and trips to the beach fill up your weekends.

So there you have it! Don’t let the impending frigid temperatures keep you from finding your dream home this winter. A true Michigander wouldn’t be scared off by a little snow, would they?

Have a specific scenario you’d like to run past us? Give us a call to speak with one of our licensed loan officers. We would love to recommend the best loan program for you and your situation.

Get More Information

To apply for a Mortgage or Refinance call Riverbank Finance today at 1-800-555-2098.

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Home Improvements and How to Finance Them

Home Improvements and How to Finance Them

I don’t know what it is about the fall, but it seems to bring out the DIY-er in all of us. Instead of flocking to the beach or heading north for a quick getaway, everyone is spending their weekends at home improvement stores. If you’ve been contemplating a remodel of your own, but don’t know quite where to start, take a look at this short list of ideas below. These improvements may be small, but they will drastically transform both the look–and increase the value–of your home sweet home.

Related: Home Loans for First Time Home Buyers

The Kitchen

Kitchen improvements tend to add the most value, especially in older homes. And given it is one of the first rooms a guest sees, you’ll want yours to make a great first impression. For a few hundred dollars, you can replace the kitchen faucet set, spice up the cabinets with new door handles, and swap out old, dated light fixtures with new, brighter, more modern ones. Have a little more to spend? Hire a refacing company to refinish your cabinet boxes, and add new doors and drawers.

The Baths

Second only to the kitchen, baths are extremely important to update, and they too can be given new life without too much cash. For a shower that has seen its better days, replace broken or missing tiles, and re-grout the rest while you’re at it. Then finish the area off with a fresh coat of caulking, and continue around all other fixtures. If you’d like to take things a little further, consider swapping out the hardware, as I mentioned in the kitchen, including faucets, door handles, lighting fixtures, and a new toilet seat.

The Exterior

It may sound like a no-brainer, but a well manicured lawn and tasteful landscaping goes a long way toward increasing your home’s curb appeal. If you’ve got a green thumb and a shovel, plant a few evergreen shrubs and patch thin areas of grass or sod. Pick up any branches or debris lying around and sweep the walkways. If applicable, you may also want to consider painting your basic steel front door and upgrading to a more substantial looking handle and lock set, to give your home a more impressive front entrance.

Storage Space

Older homes are especially notorious for their lack of storage space. Think about any under-used space you have in your home—under the stairs, in the garage, the unfinished attic– then take advantage of the many DIY closet and cabinetry systems available today. Most companies even allow you to redesign your space on their website, then pick up what you need at your local home improvement store. Still struggling to store your stuff? There’s always room in the walls—recessed cabinets are designed to fit in between the studs, and take just a few hours to install.

The Basics

Certain essentials, such as roofs and windows, should be kept in good working order. Both can be expensive to repair or replace, but not doing so could be significantly more costly–not to mention the extra you money you could be paying in utilities each month. If you’re unsure of your home’s structural condition, hire an inspector to check things out. They may discover hidden issues, allowing you to take care of them now, so they don’t become a bigger, more expensive problem down the road.

Financing Home Repairs

Now, if you aren’t the handy-type or don’t have loads of cash lying around to fund your dream remodel, you might be wondering, can Riverbank Finance help me finance that? Absolutely! There are several ways to go about it, but most notable are our renovation mortgage programs. Both the Conventional Homestyle Renovation Loan and the FHA 203(k) Loan are unique programs that can be used for both home purchases and refinances. These programs allow you–the homeowner–to finance repair costs, appliances, and other home improvements into your mortgage with one low monthly payment.

For homeowners with a fair amount of equity, an even better option may be to Cashout Refinance. This option allows you to borrow up to 80% of your home’s value in the Conventional Loan program, or 85% in the FHA Loan program. The interest rate on a cashout refinance is typically lower than that of a renovation mortgage, and both are significantly lower than a home equity line of credit (HELOC).

Have a specific scenario you’d like to run past us?  Give us a call to speak with one of our licensed loan officers. We would love to recommend the best loan program for you and your situation.

Get More Information

To apply for a Renovation Mortgage or Refinance call Riverbank Finance today at 1-800-555-2098.

Request Information Now!

Types of Renovation Mortgage Programs

Renovation Mortgage Programs

If I had a dollar for every time someone responded to my comment about remodeling and DIY projects with the phrase “welcome to home ownership!”– I’d be rich!  Not everyone has the means to build their pinterest-inspired dream home from the ground up– but what if I told you there are mortgage programs designed to help renovate existing structures?  What if your dream home already exists, and just needs some updates to make it your own?  No DIY-ing required!

Renovations programs are not very well known, and were rather unappealing before the housing crisis.  They were thought to be confusing and complicated.  As a result of the distress caused by the negative housing situation, these type of programs became more attractive to potential home buyers who sought ways to buy homes at a lower price and improve upon them.  The shift in the focus of the consumer has brought the Federal Housing Administration (FHA) 203(k) rehabilitation loan and Fannie Mae HomeStyle Renovation Mortgage to the forefront of financing options for prospective home buyers that are in the market for a fixer-upper. Both of these programs function to refinance existing homes as well.

Two Types of Renovation Mortgage Programs

When purchasing a home with a FHA 203(k) Renovation Mortgage or a Conventional HomeStyle Renovation Mortgage, the funds designated for repairs to the property are placed in an escrow account with the mortgage lender after closing. After all repairs have been made, a final inspection takes place. At this time, all contractors may submit their invoices to the lender to be paid. Renovations may not be completed by the homeowner.

FHA 203(k) Renovation Loan VS. Conventional HomeStyle Renovation

Now, you might be wondering, what is the difference between the two programs? Essentially, 203(k) is an FHA Loan Program while HomeStyle Renovation is a Conventional Loan Program. Each program, therefore, must adhere to its respective guidelines for credit score and debt-to-income limits. FHA has more strict requirements on what types of repairs can be complete to the home while the rule of thumb for the HomeStyle Renovation loan is that it can be anything that increases the value of the home and is fixed to the property. The HomeStyle Renovation Loan can be used to buy or refinance a primary residence, second home (vacation home) or even an investment property while the FHA 203(k) loan is only available on primary residences.

Which Renovation Mortgage Program is Best for Me?

If you have low credit and the property is only in need of minor repairs, the FHA 203(k) would probably be best for you, as it allows credit scores down to 580 and only requires as little as 3.5% down. If your credit score is over 660 however, and you have 5% to put down, you may be better off with a HomeStyle renovation loan, as it would likely give you a lower overall mortgage payment. In any case, if you are unsure, contact a loan officer at Riverbank Finance to discuss each program’s specific guidelines and determine which would be the best fit for you.

Take a look at Fannie Mae’s guidelines for HomeStyle Renovation Loans
Also check out FHA’s 203k Renovation guidelines

Have a specific scenario you’d like to run past us?  Give us a call to speak with one of our licensed loan officers. We would love to recommend the best loan program for you and your situation.

Apply for a Renovation Mortgage

To apply for a Renovation Mortgage call Riverbank Finance today at 1-800-555-2098.

Request Information Now!