Home remodeling has never been so popular. With more and more homeowners realizing that they can actually transform their homes into their dream properties, instead of packing up and moving, home renovations continue to be on the rise. While reality TV has shown us all the power of a good home renovation, the biggest questions many homeowners have is: how do I afford this.

Sure, having enough cash on had is the easiest way to pay for a home renovation, but there are other solutions. Here are a few of the different ways you can finance those improvements when you don’t have the cash on hand.

1. Home Equity Line of Credit- This type of loan allows you to draw out money as you need it from your home loan and pay it back at your own speed through minimum monthly payments. Typically the equity line is good for 10 years and still requires you to pay interest.

2. Construction Loan- There are specialty construction loans that can be used to build a house or make major renovations. They typically come with a lot of requirements. However, while they are short-term loans, they can typically be refinanced into a traditional mortgage when the renovation is done.

3. Home Equity Loan- With this type of loan, you can borrow a fixed amount of money and pay it back over a certain amount of time. Typically, a 15 year term is standard, but you can make the term lower. Many times, it is a cheaper option than a construction loan.

4. Credit Cards- Credit cards are a popular way to pay for all or parts of home renovations. Many people prefer credit cards over cash because it allows them to earn points.

5. Borrowing From Your 401(k)- There are many 401(k) programs that will allow you to borrow from your account and pay back the loan over a course of five years. However, if you leave your job, you will likely need to pay that amount back right away.

6. Hard Money Loan- A hard money loan is a great option to get some extra cash in your pocket to cover the cost of your home financing. This is a reliable option if you don’t have any other viable solutions.

7. A 203k Loan- These loans are typically used when you buy a house that needs a lot of repairs. They are also used for refinancing. With this type of loan, you typically have to carry mortgage insurance with your loan.
Consider these financing solutions if you are interested in doing some major home improvements to your property. They can go a long way in turning your home to the property of your dreams.

House flipping has become extremely popular in recent years. From reality television shows like Flip or Flop and Fixer Upper filling up the screens, to city neighborhoods completely transforming thanks to home flippers, there is no shortage of people talking about home flips.

Now, many people, including many with no prior home renovation experience are considering buying homes and flipping them for profit. Whether you are planning on living in this flipped home or if you are just looking to make some money, there are a few things that you should consider when deciding whether or not to flip that house. Here are the biggest mistakes people tend to make that turn flips into flops.

  1. Not Enough Funding

It can be easy to underestimate the costs associated with home flipping. You need to make sure that you have enough money for the acquisition costs, and the ability to finance all of the repairs. If you are financing the renovations, not paying for them cash, you will need to make sure you are paying attention to the interest costs. After all, every cent you spend, means another cent you need to earn when you cell.

  1. Insufficient Time

It takes a lot of time to renovate and flip a house. The whole process can take months and months and you need to make sure that you take the time to insure your project meets building codes. Remember, the more time you spend in the home once you buy it, the more it will cost you. Every day, you spend fixing up the property is a day you are spending paying back the loan.

  1. They Don’t Know What They’re Doing

There is a lot that goes into flipping a home. You need to find the right property, the right neighborhood and you need to buy and sell for the right price. It requires researching the neighborhood and knowing what you are getting into. Say you buy a house for $100,000 in a neighborhood where homes are selling for $130,000-$140,000. You may have big dreams for your renovation, but If you put $120,000 into renovations, can you really expect to sell the home for more than $220,000? You need to know where you’re buying.

  1. They Don’t Have the Patience

Flipping a home, especially for the first time, takes a lot of time and a lot of patience. You need to wait and find the right property, wait and find the right contractor and wait to make sure that the job is done correctly. Not having this type of patience only means cutting corners and delivering a sub-par final product.

Of course, the main goal of a successful home flip all comes down to buying low, selling high and making a smart investment. However, as with all things related to real estate, nothing is ever guaranteed and the market can be tricky, so the more research you do the better.

When it comes to understanding all of the different types of loans that are out there, some of the biggest questions that potential applicants tend to have are about Fannie Mae and Freddie Mac. So, what are these parties and what do they do?

The answer is actually quite simple, and the more you know about these entities, the better off you may be with your upcoming loan application. Here are the most important facts:

  1. Freddie Mac and Fannie May were both created by Congress.
  2. They were both designed to provide stability, liquidity and affordability to the mortgage market.
  3. Both companies provide easy-to-access funds to banks and mortgage companies that finance housing.

Fannie Mae first started in 1938. It was designed by Congress to help make certain there would be a reliable and affordable amount of mortgage funds available throughout the country. Today, Fannie Mae is a company that is owned by shareholders and that operates under a congressional charter.

Freddie Mac was chartered by congress is 1970 as a private company. The company was established, like Fannie Mae, to help make sure there was a reliable and affordable supply of mortgage funds available throughout the United States.

How do Fannie Mae and Freddie Mac Work?

So, how exactly do these companies work and how are they sustained? Well both Fannie Mae and Freddie Mac purchase home loans made by private companies. Then, they package those loans into what are known as mortgage-backed securities. They then guarantee a timely payment of the principal and interest on these mortgage-backed securities to other investors.

Both companies also have some of these securities of their own.

So, what is the incentive? Since mortgage lenders don’t have to hold these loans on their own balance sheets, they have more capital available to give loans out to other worthy borrowers. They are also more reliable options since these companies guarantee payments, even in the event of a default. This is why they are so attractive to many investors.

How Do They Impact Homebuyers?

As a homebuyer, you may never directly work with either Freddie Mac or Fannie Mae, but they may still be able to help you as you get your own home loan. While there are certain requirements you will need to make in order to get this type of loan. If you qualify it typically comes with lower interest rates and origination fees and more customizable programs. Both companies also have programs that can help first-time buyers better understand the mortgage process and secure the loans they are looking for.

If you are interested in seeing if you qualify for a loan backed by these two companies, the first step is to meet with a loan specialist to learn more about Fannie Mae, Freddie Mac and what it may be for your home buying process.

Today, mortgage companies are more strict than ever when it comes to issuing home loans. While banks have their reasons for being strict with their loans, it can be very difficult for many people to secure the loan they need to get the home they desire. While there are a few different reasons as to why banks tend to deny mortgages, one of the most common reasons has to do with credit scores. If you have a bad credit score, chances are the bank is going to deny your application. Or, you may get approved, but with a very high interest rate. However, that doesn’t mean that your dreams of buying a home have to be denied with your application.

While you may not qualify for a traditional mortgage, there are still ways that you can get a home loan, even if you have bed credit. One option is to put down more for your down payment, which would therefore mean you need to borrow less from the bank. However, for most people this simply isn’t a viable option, as potential buyers simply don’t have that much extra cash sitting around.

This is where hard money loans can come in. So many people today struggle to get the home loans that they need, while battling the impact of a low credit score. A hard money loan is not only significantly faster and easier to secure than a conventional mortgage, but it also is a viable solution for those with bad credit. These loans can work great for a primary home or an investment property because the loan is not based on the borrower’s credit score or their income. Instead, lenders who offer hard money loans base the loan on the property itself.

Hard money loans come from private lenders that aren’t affiliated with traditional banks and aren’t traditional mortgage lenders. These lenders look more at the value of the home as the most important determining factor in giving you a loan, not your credit score or current financial situation. They aren’t only just great for those who want to buy a home but have a poor credit score, but they are also a popular solution for those who have had bankruptcies or foreclosures in the past.

In short, these loans are fast, they are flexible and they are easy to get, which is why so many people, particularly those with bad credit often turn to these solutions when they need a home loan. In most situations, you will not be able to get 100% of the property value, but lenders will give you a loan that covers a significant amount of that home’s value, making it easier than ever to get the loan you have been looking for, no matter what your credit score may be.

Buying a home can be a great investment for many people and a fantastic opportunity to find the perfect place for your family to settle down in. However, financing that home can sometimes be a challenge as the mortgage process has become increasingly stringent, making approvals more challenging than ever.

If the bank has rejected your application for a mortgage, it can be extremely frustrating, and it can seem to crush your dream of owning your own home. However, just because your application for a traditional mortgage was denied, it doesn’t mean that all hope is lost. If you have been rejected for a mortgage here’s what you can do next to get back on track and get the loan you need to make your home-buying dreams a reality.

Step One: Find Out Why You Were Rejected

This is the most important steps to take whenever you get rejected for any type of loan. You need to know why your application was rejected. The bank is actually required to provide a specific reason why you have been denied. Bad credit and insufficient income are the most common reasons loans are denied. Having this information can help you prevent issues in the future and get a better idea of where your finances really are.

This will also help you realize what you need to change your financial situation for the better.

Step Two: Apply for a Hard Money Loan

When you have been rejected for a conventional mortgage, all hope is not lost. You can likely still get a hard money loan. This is a short-term loan that can are easier to get than a conventional loan and the process is much quicker—which is something everyone can enjoy.

When obtaining a hard money loan for a real estate purchase, the loan is actually backed by the value of the property—not your creditworthiness as a borrower. If your original mortgage application was denied due to lack of income or a poor credit score, this is a quick solution that can help. Applying for hard money loans isn’t only easy, with a very simple application behind it, but lenders are often able to approve applications in just a day or two.

Also, since hard money loans are available through private lenders, so you can be a little more flexible with how your loan is set up. In short, they are not as strict one repayment schedules and fees as mortgages. With this type of loan, the property you are buying is used as collateral, but you may be able to get your loan using other assets, properties or accounts as well.

This type of flexibility is what makes hard money loans such a popular option for so many individuals. It is a great way to get approved for a property quickly and to not have deal with all of the red tape that often comes with bank financing. While every situation is different and every person may benefit from different types of loans, this is a great solution to explore if you have ever been denied on a mortgage and still want the opportunity to secure the property you are interested in.

Bitcoin is a new form of currency that is becoming more and more popular around the world. It is a form of direct payment, between two parties, and the value of a single Bitcoin fluctuates much like a share of stock in a company that is traded on the stock market. Today, one Bitcoin might be worth $50 and a few days later is may go up or down by $1000. The absences of a regulatory group or bank has some real estate professionals a little bit skittish, but those who are comfortable with Bitcoin as an operating currency model are finding that many buyers and sellers are starting to ask about the option to use Bitcoin for their transactions.

The first home ever to be purchased with Bitcoin was in Austin, Texas. In that transaction, the buyer wanted to pay with Bitcoin and the seller wanted to convert that payment into dollars. In this case, a special payment service called BitPay was used to manage the transaction. This allowed one party to pay with Bitcoin and the other party was able to cash out the payment with dollars.

But what if both parties want to complete the transaction directly using only Bitcoin?  That can be done too. It is one of the pros of using Bitcoin for a real estate purchase. Bitcoin is a direct currency, meaning that the funds go directly from one person or account to another, there is no regulated bank serving as the middle man. Because payment is direct and virtually instant, it is possible to complete the entire real estate transaction in a matter of minutes. Most regular mortgages will require 24-48 hours to complete transactions because multiple banks are regulating the flow of currency and require time to review and manage the details of the transaction.

It is important to understand that Bitcoin transactions are not reversible. If one party wants to make a change or decides against the purchase after the fact, then both parties will have to agree to a second transaction that reverses the purchase. If both parties do not agree, that transaction is done. With no bank or regulating entity in place, there is no customer support team to contact with a dispute.

One of the concerns for many around using Bitcoin for real estate transactions is that the value of a Bitcoin is constantly fluctuating, sometimes within hours. So selling a home at an agreed amount of Bitcoin may be a completely different agreement between 10am and 11am on closing day.

Today, realtors from California to Florida are finding that more and more clients ask about buying with Bitcoin. The fluctuations in value for this new currency model is coming to be accepted as a good match for real estate investors. They accept the ups and downs of the model the way that accept fluctuations in the stock market. If both parties are open to using Bitcoin, there is no reason it cannot happen. There are many properties already listed with an offer to manage the transaction with Bitcoin.