With your own home you have fulfilled a dream. In the first five to ten years, you will rarely have larger handicrafts done around the house.
But when the children are standing on their own two feet, the bathroom no longer fits into the picture, or if one thinks of getting older, a change is necessary.
Depending on the age of the property and the scope of the work required or desired, the renovation can quickly cost several tens of thousands of USD. Money that not every household can afford.
Before converting – check different alternatives
If you’re a homeowner thinking about a modernization project, you can use various financing options. The home loan is just a variant that you should think about. Many banks today offer so-called renovation or modernization loans – especially for a medium-sized capital requirement.
At the same time – provided that the focus is on an energetic conversion or accessibility – the search for suitable funding programs can be worthwhile. What should you watch out for in the case of debt-financed renovations?
Building finance shows its strengths when larger amounts of capital (more than 50,000 USD) are required for the renovation. The advantage: If there is still a land charge on the property, you save money for the new entry in the land register and you should also check this option for somewhat lower sums.
On the other hand, the so-called modernization loans offer the advantage that the homeowner can act relatively flexibly with regard to the loan amount, since there is considerable scope downwards. In addition, the modernization loan is usually issued without a mortgage, which can make the loan cheaper.
Home loan quick comparison
Special repayments are often possible without a surcharge, especially in the context of a construction loan. For the other forms of financing, there is a risk that homeowners will pay dearly for this way of getting out of debt through a prepayment penalty.
- A construction loan or the modernization loan can be subject to restrictions. If there is the possibility of financing through a simple installment loan, these requirements can be omitted.