Fund
your project with a loan
2nd mortgage can help with bank loan
By Sarah
Langbein
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Photo
courtesy of Joe Maga
Like
night and day: The
house above in south Fort Collins appears before remodeling.
Below the home sports new facades, entryways and garage
space for a third car. A mortgage loan for up to 90 percent
of your home's value can help you repay a construction
loan.
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The
Coloradoan
Big
dreams unfortunately cost big money.
And remodeling your home isn't any different.
But instead of waiting to hit the jackpot,
talk to your local bank about the type of loans you might qualify
for. Larry Wood, president of the Centennial Bank Ptarmigan branch,
suggests looking into two types of loans -construction or second
mortgage.
If you are looking to do a major remodeling
project, banks generally require a construction loan. The construction
loan also is a great type of financing for people with limited equity
in their home, said Wood.
Here is a list of documents Centennial Bank
recommends you bring to be considered for a construction loan:
n
A financial statement with current assets and liabilities.
n
Tax returns from the past two years.
n
A legal description of the home.
n
A copy of the remodeling plans and an estimate of the costs.
n
A copy of the contract, if the work will be done by a third party.
n
A copy of the permanent loan commitment that states how you plan
to pay off this loan.
At
the time you close on a construction loan, Centennial Bank requires
notification of how the loan will be repaid.
If you have enough equity in your home,
you might want to check into taking out a second mortgage loan.
You will typically get a loan up to 80 or 90 percent of your home's
equity, Wood said. This loan also can be used to help pay off a
construction loan.
For a second mortgage loan, Centennial Bank
requires three documents to get started - a financial statement
listing current assets and liabilities, tax returns from the past
two years and a legal description of the home.
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