What should you consider before applying for a home remodeling loan?

If you are thinking of remodeling your home, you can consider financing this activity by applying for a loan from a financial institution. In this case, we will tell you what you should consider before applying for a home remodeling loan.

To meet your own and / or family’s needs and wishes

To meet your own and / or family

You may be considering remodeling your home. Your desire to adapt the physical space of your home is normal, adapting it better to the needs of each stage of your life.

To help you finance the remodeling of your home, some Peruvian financial institutions offer loans for this purpose. These are of the loan type with mortgage guarantee, in which you use the same property to be refurbished as a payment guarantee.

Considerations when applying for a home remodeling loan

Considerations when applying for a home remodeling loan

Since you use the figure of the mortgage, you can only apply for this loan, for the remodeling of a home you own.

The payment term for this type of loan is between two and ten years, depending on the institution.

The loan amount is for 100% of the valued budget of the remodeling. That is, you must submit a remodeling budget, which must be endorsed by the professionals of the financial institution.

The loan amount cannot exceed a percentage of the appraised value of the property to be remodeled. This percentage is around 50%, varying according to the granting institution.

Before receiving the loan, you must cancel the appraisal

Before receiving the loan, you must cancel the appraisal

Notary and registration expenses, and the issue of one or more management checks. Therefore, you must have extra money to cover these costs.

Some institutions disburse the loan in several installments, and not in a single payment. In this case, you must justify the use of the money from the previous payment before receiving a new one.

Some institutions grant a grace period of 90 days, if you make the corresponding request.

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