What is Future Value Loan?

In today’s blog post, we’ll be discussing the concept of a future value loan and how it can be beneficial for homeowners looking to make improvements to their homes.

Have you ever wanted to add a new room or make significant renovations to your home, but found that the current value of your property was not enough to support the costs? This is where a future value loan comes into play.

Homes in their current condition may not appraise high enough to qualify for a loan to finance improvements. However, with a future value loan, you can overcome this hurdle. In a purchase or refinance scenario, a contractor or renovation consultant will estimate the cost of the improvement, whether it’s a small renovation or a major overhaul, and include it in the appraisal ticket.

When the appraisal is ordered, the appraiser takes into account the planned improvement and appraises the house at its projected higher value. Based on this appraised value, the lender provides the loan amount. The loan is then closed, and the funds for the contractor are placed in an escrow account. As the project progresses, the contractor is paid gradually, and we help monitor the process to ensure everything goes smoothly.

The beauty of a future value loan is that it allows you to tap into the future equity of your home. Instead of waiting years for your property’s value to increase naturally, you can leverage the value that the improvement will generate. This way, you can finance your home improvement project today, without having to wait a decade.

So, if you’ve been dreaming of an upgraded home but were deterred by current property values, a future value loan might be the perfect solution for you. It’s a great way to keep money in your pocket and make your home improvement goals a reality.

Good luck with your projects, and stay tuned for more informative blog posts!