Home Loan

How many times has this happened to you? You’re sitting on the worn-out deck of your aging house, munching on some salty bird and fries, sipping back a can of pop or beer, thinking about how great it would be to fix up your home to good-as-new status… if only you had the money. If you’ve had this thought more than once, you obviously haven’t yet realized the simple solution: get a home loan!

A new deck isn’t the only thing a home loan can get you. People take out home loans to renovate kitchens, bathrooms and other rooms around the home; to add extra rooms or floors to accommodate a growing family; to perform home repairs; and all kinds of other home-improvement purposes.

If there’s one thing out there that lending institutions understand, it’s the importance of a comfortable home. This means that there are many options available to you, and many types of home loans to choose from. Be prepared: home loan-shopping is not a task that requires no original thought. You really have to know your needs and weigh your options. Do your research to find the home loan that best suits your requirements.

The type of home loan you choose depends on your situation, and the kind of home improvements you hope to make. Consider the following scenarios:

Prospective home owners find a home they absolutely love. It’s perfect—it’s in a great neighborhood, close to all amenities, has a huge backyard, gorgeous kitchen and living room, and enough big bedrooms to accommodate their existing family, plus the little “addition” they’re hoping to add within the next 2 years. The problem? The bathroom is a mere step above an outhouse. These people have 2 choices: ditch their almost-dream home and settle for less, or take out a loan that covers the cost of the new home PLUS the cost of renovating the bathroom. Obviously, option #2 is well-worth investigating. If you are already taking out a loan to cover the cost of your new home, why not take out that little bit more and make your new nest perfect? This type of loan is called a mortgage renovation loan.

A young family of four has lived in the same house for seven years. They have been a single-income family, as one of the parents has stayed home to look after the children. Now that all three children are in school, however, the stay-at-home parent has decided to go back to work. Fortunately, his or her parents have just retired and, after some much-needed traveling time, have offered to help care for the children in the hours between school and the parents’ return for work. In exchange for the child care, the working couple decides to add on a third storey to their house, which can serve as a mini-apartment for the grandparents. The couple opts for a second mortgage, a type of home loan subordinate to the first mortgage, to help cover the renovation costs.

A twenty-something couple, married for 3 years, has been working by day and partying it up by night, living in cluttered downtown apartments with cracks in the ceiling, hit-and-miss plumbing and questionable scratchy noises within the walls. However, they’ve decided to turn their party of two into a family of three, and what better environment to bring a baby into than a cozy house in a tree-lined suburb? Of course, the couple’s entry-level salaries won’t quite cover the cost of the home. The couple opts for a type of home loan called a mortgage. A mortgage is a written agreement that ensures you will pay for the home you have purchased over time. It works like any other loan, with a down payment, principal and interest. The more of this home loan you have paid off, the more of your home you actually own.

There you have it, three out of a countless number examples. No matter what your needs may be, there’ll surely be a home loan out there to satisfy them.