Many people are starting to renovate their homes, even though this is not an easy thing to do. Wages and material prices have risen. There are few who can finance the renovation of the apartment in cash. It can be good news for them that many credit institutions in Hungary have mortgage loan facilities specifically designed for home renovation and home improvement within general home loans and construction loans. Let’s look at the features of home improvement and modernization loans.
Home renovation and modernization loan
What is a home remodeling?
Home renovation includes all general repair, construction, installation work which restores the original technical state in whole or in part, as well as works during which the usability and aesthetic appearance of the property are improved by replacing and altering certain structures and equipment.
What counts as home modernization?
Modernization of the apartment is considered to be the introduction of water, sewerage, electrical, gas utilities, the construction of the internal network, the establishment of a bathroom in an apartment where such space does not yet exist in order to increase the comfort level of the apartment. In addition, modernization includes the construction or replacement of district heating, including the use of renewable energy sources (eg solar energy), and insulation of the building, including thermal, acoustic and waterproofing, energy-efficient replacement of exterior windows, roof replacement, insulation.
Why Choose a Home Renovation or Modernization Loan?
- As home improvement and modernization loans are home loans, they have the same terms and conditions as a home purchase loan.
- There is also state support for renovation combined with home savings and through home improvement tenders, and there is a separate subsidized home loan for home modernization.
- You can claim a higher amount for a home improvement or home improvement loan because some banks determine the maximum funding ratio for these loans based on the real estate value expected after the home improvement or home improvement.
What embodiments can there be?
- Organized construction: Home renovation work carried out by a construction company on behalf of the builder. The assignment may be for the entire construction work or only for the part work.
- Domestic work : The construction work of the home renovation by the builder.
- Mixed execution: Combined use of organized and home-made work during home renovation.
What are the specifics of home improvement and home improvement loans?
- When applying for a home remodeling or home improvement loan, almost every financial institution needs to provide a planned budget.
- Most of them are pre-funded, so if the lending institution has examined the property, budget and borrower’s income and has approved your application, it will transfer all or part of the loan before work begins.
- For larger home improvement loans, or if the value of the original property is not sufficient to pay off the total amount of the home improvement loan, they are usually paid in installments, ie in several installments, but may also be given in one lump sum.
- Especially for subsidized home improvement loan forms, it is a requirement that the credit institution bills the costs, but in the case of market-rate home improvement and home improvement loans, financial institutions generally do not require invoicing.
- You can only apply for a home improvement loan or home improvement loan that does not exceed the budgeted amount.