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HOME RENOVATION FINANCING
IN MINNESOTA

Need Work Done On Your House? Financing A Home That Needs Renovation?
NorthPort’s Got You Covered!

What Is A Home Improvement Loan?

Things break - that’s an inevitability. Even if you take the greatest care of your household, eventually a remodel will be in order.

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A home improvement loan helps you improve your quality of life immediately.

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A home improvement loan can help you:

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  • Add value to your property

  • Increase the comfort and living standard

  • Turn your house into a home

The Three Types Of Home Improvement Loans:

There is no legal or official definition of a home improvement loan. It’s just a loan you take to finance your home repairs.

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Here are three most common ways you can get your home renovation financed.

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  • Personal loan

  • Home equity loan

  • Home equity line of credit (HELOC)

Personal Loans For Home Improvement

A personal loan is the most common way to find money to improve your household. The ‘personal’ part means that it’s not tied to any collateral - if you fail to keep up with your payments you won’t lose your house.

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Seeing as though it’s an unsecured loan, personal loans usually carry higher interest. Contact us to find out what we can do for you!

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Personal loan benefits:

  • You pay in fixed monthly increments

  • You don’t have to use home equity

  • The loans can be finalized much quicker

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Personal loan drawbacks

  • Higher interest rates

  • You may have a hard time approving them

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HOME EQUITY LOANS FOR HOME IMPROVEMENT

If you have equity in your house, you can put it up as collateral for a loan. This makes it much more likely that you will be approved, although the approval process may be more complicated.

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Seeing as though equity can be defined as ‘the part of your mortgage that you’ve paid off’, taking out a home equity loan is like taking up a second mortgage. This makes the underwriting more difficult, and closing costs may occur.

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It also means the amount you will be able to loan depends on the amount of equity you have on your property.

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Home equity loan benefits:

  • A secured loan means a lower interest rate

  • You pay in fixed monthly increments

Home equity loan drawbacks:

  • You must have equity in your home

  • You will probably incur closing costs

  • You may have to allow for an inspection of your home

Home Equity Line Of Credit (HELOC) For Home Improvement

Taking out a home equity line of credit is sort of like taking out a home equity loan and applying for a new credit card at the same time.

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When approved for a HELOC, you get access to a limited amount of funds that you can withdraw as you please, and pay back with interest. Just like a credit card.

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It may be the best way to borrow money for a home renovation. Home improvement jobs usually take time, and HELOCs allow you to borrow money at your own pace and not in one large lump. 

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HELOCs are secured by equity in your property, so the interest rates are usually lower than for personal loans.

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The underwriting process is more difficult, however, and you may need to allow for a home inspection. You will also suffer closing costs and the payments may change as you take out more money.

HELOC benefits:

  • Lower interest rates

  • Borrow money over time as you need it, not in one lump sum

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HELOC drawbacks:

  • Installments may change

  • You have to have home equity

  • Closing costs and a harder underwriting process

This Is All General Information.
Each Case Of Borrowing Money For Home Renovation Is Unique

Contact NorthPort Funding and we will find a specialized solution just for you!

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