Over the past year, the home has become the office, the classroom, the gym, and our safe place. After spending so much time at home, many homeowners wonder, have I fallen out of love with my home? Does my family need more space, or do we need to do more with what we have? Home inventory is low right now. Houses are spending almost no time on the market before the highest bidder snatches them up, so before you think about selling, be sure you can get a new home that you will love to replace your current home.
In this 5 part series we will highlight the top 5 renovations of 2020.
Part 5: The Home Theatre
Theatres across the country were closed due to covid-19. Many people decided to build a home theatre to fill the void. A home theatre could consist of buying a projector and a few love seats or a much more involved and expensive project. It may just be the homey solution you have been looking for to binge-watch all those Netflix series, too. If you have kids, this is a wonderful opportunity to get them involved creatively in planning. You can create a home theatre at many different price points. Here are three different takes on this project:
Home “Classic” Theatre:
DIY $4K Home Theatre:
Home Theatre Systems:
If your final decision is to give your home one last chance before you end it, you will need to find a way to pay for these renovations. A great way to do this is to get the money from your home by doing a cash-out refinance. A cash-out refinance is a type of mortgage refinance that uses the equity you have built over time and gives you cash in exchange for taking on a larger mortgage. You borrower more money than you owe and take the cash to use for a project of your choice.
Mortgage lenders set the requirements regarding who qualifies for a refinance. Things they consider include:
- Credit Score-your credit score needs to be at least 620
- Debt to income ratio – you generally need a DTI ratio of 43% or less
- Equity in your home-you need at least 20% equity in your home
- Appraisal – you will need a recent appraisal of your home to assess its current condition
With rates at historic lows, if you have equity in your home, you can borrow money at a much lower interest rate than you would pay if you used a credit card or financed renovations through a retailer. If you are ready to start your home makeover today, contact one of our mortgage loan officers today to learn more.
All posts in this series: