I have a partially completed renovation that I need to borrow to finish. What is the best way to move forward?

Asked by Partial_j, New Orleans, LA Fri Mar 4, 2011

I started a renovation on my house thinking it would be better to minimize the amount I borrowed. Well, everything has gone ok and I'm at the point now where I need to borrow to finish it only to find out that there is a huge stigma attached to projects that are partially complete. There are, will be, no liens against the property. I have good credit. The finished value of the house will more than justify the loan. What are the best options available for loan products?

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Corey Grushin, Agent, East Brunswick, NJ
Fri Mar 18, 2011
Partial_i, FYI FHA guidelines state you can't do a 203k loan to finish work that has already been started. I originally stated you should try and finish the job using your credit cards. After the work is completed you can then refinance. Another option is to apply for a home equity loan or line of credit. Usually Home Equity loans don't require an inspection of he home.
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Craig Pattbe…, , Midvale, UT
Thu Mar 17, 2011

I loan money through LendingClub.

I also wanted to see how easy it was to get money, so even though I did not need the money - I borrowed $3,500 to finish of a remodel.

I was really quite easy to qualify for the loan. I got the money, finished putting in carpet and painting and when the property sold I paid the money back right away.

It is called peer to peer lending. You can borrow up to $25,000 for up to 60 months. Might be a good choice for you.

Good luck and let me know if you have any questions.

Web Reference:  https://www.lendingclub.com/
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Get-smart, , Durham, NC
Thu Mar 17, 2011
You could try a 203k and there are other companies that perform private loans. You can check into heloc loans as well.
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Abraham Walk…, Agent, Alexandria, VA
Thu Mar 17, 2011
This advice does not constitute an agency relationship. This is just my opinion.

Try a 203K loan. I have heard that current homeowner can apply for renovation loan to improve their current homes. Don't know if it's true (because I only help individuals buy or sell) but HUD's website talks about it here: http://1.usa.gov/iisJNt

Only banks that I know in the city processing 203K loans is:

Standard Mortgage
Wells Fargo
Gulf Coast Bank

Hope this helps.
Web Reference:  http://abrahamwalker.com
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Corey Grushin, Agent, East Brunswick, NJ
Mon Mar 7, 2011
Partial_j depending on what needs to still be completed will determine if you CAN borrow against your home. The easiest solution is to finance it yourself on crdit cards if you can. Incomplete work on a house can be a zazard issue and a lot of banks won't lend on such a property. This is difficault to overcome from the finance side.
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Dp2, , Virginia
Sat Mar 5, 2011
You might consider working with a credit or equity partner.
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Ben Fox, Mortgage Broker Or Lender, Washington, DC
Fri Mar 4, 2011
Hello Partial J-

It really depends on how complete the house is. If its most of the way done, meaning under roof and plumbing and appliances are in, you shouldn't have an issue considering the house is free and clear. If you have more than that, you can either go hard money or do as Don says and put it on your credit cards.

If you do put it on a credit card, you can always pay the debt off if you refinance when the house is complete.
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Don Tepper, Agent, Burke, VA
Fri Mar 4, 2011
It depends on lots of factors.

For instance, if you have a good relationship with your bank, approach your bank for a loan. Approval should be reasonably quick, and the interest rate reasonable.

A HELOC might be overkill. And a HELOC would appear as a lien on your property.

If you have some other credit line--such as one attached to your checking account--that'd be a possibility. Though the interest rate is likely to be substantially higher.

Depending on how much you need--and what your future plans are--there's always credit cards. Moderate-to-high interest rate, but you totally control the funds and no lien shows up on your property. But if you plan on then selling in order to buy a new property, the credit card balances may be a barrier to your getting approved for a new mortgage. (Debt-to-income ratio.)

Can you get financing through any of your contractors? The interest rate may be high and it could result in a lien on your property. But that's another source of funds.

So, as you can see, the answer depends on a lot of things: Your current credit and your banking/credit relationships, how much you need, what your plans are after the renovation is completed, and what your comfort level is with the different options.

Hope that helps.
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