Financing for customers in the home improvement industry varies greatly. While many homeowners don’t have all of the necessary funds on hand to make upgrades, there are plenty of financing options available. One such option is staged financing.
As the name implies, staged financing involves the borrower receiving portions of the funds in stages. This type of financing is sometimes difficult because it means that the borrower won’t have all the money needed at the beginning of a project. Also, the lender may withdraw the funding at any stage, leaving the borrower hanging. However, you have more options available for your business. You can give customers financing options that are not staged financing. Here are some possibilities for your successful business.
Home Improvement Loans
One benefit of a home improvement loan is that a customer’s home is not on the line if they get into any trouble with repayment. Once approved, the money is often available quickly. That said, having a good credit score is usually necessary to qualify. Also, loans tend to be smaller and often require relatively quick repayment.
Home Equity Line of Credit
If a customer is looking at getting into a longer renovation project, a home equity line of credit is an option. This type of credit allows borrowers to withdraw money out of the equity in their home as needed. Low interest rates are possible, but they may fluctuate over the course of the loan. Unfortunately, the downside is that the customer’s house is on the line if loan repayments are not made.
Home Equity Loan
Like a home equity line of credit, a borrower’s home secures this loan. Again, that means that if a person gets too far behind on repayment, they could lose their home. The benefits of this kind of loan are that the borrower can often get a significant lump sum to put into home renovation and pay it back at a fixed rate.
Mortgage Refinancing
A homeowner may choose to redo their original mortgage to pay for home renovations. This means that the mortgage is redone to include the renovation funds needed, adding to the total owed. As a result, the borrower may end up with a lower interest rate but have a higher amount owed on their mortgage. They may have to pay costs such as closing costs that typically apply to taking out a mortgage.
Government Loans
Some home upgrades qualify for government loans. It’s important to note that government loans are typically granted to make a home a more livable space. Not every home renovation qualifies for this type of loan, but there are some serious perks to those that do. Often, borrowers don’t require home equity and may not have to worry about interest or insurance.
The Best Loan
Do you want to offer your customers the very best in financing options? Offer HFS Financial as your financing partner! When you work with HFS Financial, you’ll never face the delays of staged financing that can have a negative impact on the important work you need to get finished.
Get in touch with HFS Financial today to discover how we make the process quick and easy for both you and your customers. You Dream It, We Finance It!