A pool house construction project gives the property owner a new space near their pool. They can use the pool house for overnight guests or give friends space to shower after swimming. It offers more privacy than the primary home and offers ample living spaces. Financing a pool house construction project requires the homeowner to review their options more fully.
Reviewing the Requirements for a Second Mortgage
The borrower must have an extensive amount of equity built up in the property. They must have excellent credit, and the borrower cannot have a lot of debt. Lenders won’t approve a second mortgage if the property owner has poor credit, or if they have accumulated a lot of debt since they purchased their home. Their income to debt ratio must be below 43% for the second mortgage. If the borrower defaults on the loan, the lender forecloses on their property.
However, it is a helpful choice for buyers that want to build a pool house on their property. Depending on the price of the design, the buyer can get enough money through their equity to pay for it. If the property design isn’t extensive, the buyer may have other options available to them instead of a second mortgage.
Home Equity Loans
Home equity loans provide the property owner a lump sum payment from their equity. The borrower cannot get more money after they agree on an amount for the loan. This means that if the cost of the pool house construction increases the borrower cannot access any more of their equity to cover the costs. When the repayment period starts, the homeowner gets a fixed interest rate and pays the loan back within 30 years.
Home Equity Lines of Credit
A home equity line of credit gives the property owner a line of credit to access over a predetermined period. The borrower can get as much money as they need from their equity at any time during the borrowing period. After the borrowing period, the borrower cannot get any more funds for their pool house construction. The line of credit is repaid through an adjustable-rate loan for up to 15 years. Borrowers can get more information about financing a pool house from Dustin Dimisa now.
What is required to start the Project?
When starting a new construction project, the property owner must work with their builder to get permits and approval for the pool house construction. Most builders want a percentage of the project upfront, and the homeowner will pay for supplies as they are required. Building inspectors complete an inspection at each phase of the construction. If problems increase the cost of the project, the property owner must provide additional funds. If the buyer changes anything about the project, it could also increase the cost and require more payments.
A pool house gives the property owner a space for visitors to sleep when visiting the owner. The designs are simple and often include a living space, a bedroom, and a bathroom. Since it is not a complete home, the projects could be completed with few issues. Buyers can learn about financing a pool house construction by consulting a lender today.
