If the time has come to start the renovation of your first home, but you do not have the amount necessary to face the expense, you will necessarily have to apply for a loan. Finding your way among the numerous alternatives is not at all simple. In this article I will try to provide you with guidelines that will help you in choosing the solution that best suits your needs.
Loan or mortgage?
If you have already started to inquire about possible alternatives, you will have noticed that it is possible to obtain the liquidity necessary to support the work both in the form of consumer credit (personal loan, finalized or assignment of the fifth), and in the form of a restructuring loan. Let us shed light on the differences between the two types.
First home loan
It is the most suitable type of financing to choose in the case of requests for small amounts and in the case of urgency of the funds. In fact, normally a personal loan has a duration of up to 120 months, so if the sum to be financed is high, the monthly installments will inevitably be of considerable amount, certainly higher than those of a mortgage that spreads the repayment of the debt. even on 30/35 years. It is therefore more easily sustainable for amounts up to approximately $ 50,000.
Furthermore, a personal loan is characterized by rapid and reduced preliminary and disbursement times, therefore it is preferable to a mortgage, whose times extend even to 60 days, in case of need of immediate availability. Another advantage of a loan is that the only requirement to obtain it is the demonstration of receiving an income capable of supporting the repayment. In most cases, no further guarantees are needed. Many banks, however, only allow those who have already held a current account with them to apply for a loan.
In the event of early repayment of the debt, some banks or financial companies may require payment of compensation.
Banks and financial companies offer dozens of different consumer credit offers. To make a conscious choice, remember to always compare the APR of the various alternatives, because it is the value that indicates the actual cost of the loan in question, including most of the ancillary costs, such as stamp duty, preliminary investigation, collection of installments, etc.
Mortgage for first home renovation
In favor of the loan, we certainly find the longer duration of the loan which allows to contain the amount of the installments even in the case of a high amount disbursed, and the interest rates decidedly lower than those typically applied to a loan. The incidental costs of a mortgage, however, be careful, are higher and more numerous than those of a loan, because it is necessary to consider in addition the costs of the appraisal, the notary and the insurance, which are amortized compared to a loan only if the amount requested exceeds approximately $ 50,000, making it more convenient.
Another factor not to be underestimated is the fact that to obtain the mortgage it is necessary not only to prove that you receive a constant and adequate income, but you also need the real guarantee of the mortgage on the property.
If you consider any tax deductions, the mortgage will allow you to deduct 19% of the interest paid annually on a maximum amount of $ 2,582.25. The loan does not include any type of deduction.
In the case of early repayment of the debt, no compensation is due on the mortgage. Furthermore, to request a mortgage it is absolutely not mandatory to be a holder of a current account with the bank that provides it.
Tax deductions 2019
It may be useful to know that, whatever the form of financing chosen to subsidize the renovation of your home, you can deduct 50% of the costs incurred for ordinary and extraordinary maintenance work carried out by 31/12/2019 from Irpef, up to a maximum limit of $ 96,000, following the limitations and the established methods (payments must be made by bank or postal transfer with the following information indicated: reason Bank transfer relating to construction works that give the right to the deduction provided for in article 16-bis of Presidential Decree 917/1986, your tax code and tax code or VAT number of the beneficiary of the payment). You will recover these deductions in the next 10 years, once a year.
Banks and financial institutions 2019
Here are a few examples of first-home renovation loans offered by banks and financial institutions:
Best Bank Home Renovation Loan
If you are a Best Bank account holder you will be able to access a loan for the renovation of your home by presenting the documents relating to the cost estimates and the actual order forms for the purchase of the necessary materials. You can request from $ 10,000 to $ 60,000, at a fixed rate, to be returned in 36/120 months with a debit account.
You will be able to take advantage of this type of financing even if you have an ordinary registered postal passbook, but the maximum amount payable in this case drops to $ 30,000 and the repayment will be made through postal bills paid by the customer. These loans are brokered by Best Bank but disbursed by Infra Bank or Lite Lender Company at no additional cost.
- Amount: $ 15,000
- Duration: 78 months
- Installment: $ 246.51
- Fixed TAN: 7.90%
Capital Lender Loan Home Renovation
Capital Lender also offers its account holders the possibility of requesting a loan for the renovation of their apartment upon presentation of the due documentation of the estimates. You can request from $ 3,000 up, up to a non-predefined maximum, based on your needs, to be returned in 19/120 months with installments charged to your current account.
- amount: $ 13,000
- duration: 120 months
- installment: $ 176.38
- Fixed TAN: 10.49%
Across Lender CreditExpress Renew
If, on the other hand, you are a Across Lender account holder, you can request, following the submission of the estimates and a self-certification in which you ensure that the funds received will be used to carry out the work, the payment of an amount from $ 5,000 to $ 100,000 to be returned in 36 / 120 months. Fixed TAN: 6.50%.
- amount: $ 50,000
- duration: 96 months
- installment: $ 669.31
- Fixed TAN: 6.50%
Loan Lite Lender Company Home renovation
Wherever you have a current account, you can contact Lite Lender Company to request from $ 1,000 to $ 60,000 to be returned in a maximum of 120 months. Flexibility ensured thanks to the possibility of slightly varying the amount of the installment every month and to periodically postpone the payment in case of difficulty. Further fixed TAN facilities are provided for works aimed at saving energy or using renewable energy (RataVerde loan).
- Amount: $ 15,000
- Duration: 96 months
- Installment: $ 199.00
- Fixed TAN: 6.43%
Spin Lender Loan Riparti Italy
If you are a Spin Lender account holder and have invested assets of $ 5,000 and up at the Bank, you can request, by submitting the due estimates of the works, from $ 4,000 to $ 100,000 to be returned in 12/120 months.
Do not underestimate this interesting alternative if you are a civil servant or a retired former civil servant. It is a loan at a subsidized rate (TAN 3.50%) the maximum amount of which depends on the size of your salary or pension, and which is repaid by holding on the paycheck / pension slip in 60 or 120 months, with installments the amount of which can never exceed one fifth of the salary / pension. These are strictly regulated loans both as regards the requirements necessary to be able to access them and for the use of the funds disbursed. The reasons for the request include ordinary maintenance (five-year loan, max. $ 30,000) and extraordinary maintenance (ten-year l
The list of products is purely indicative: almost all banks and financial institutions offer loans aimed at home renovation. We therefore recommend that you also contact your trusted bank, perhaps of which you are already a current account holder to check if there are specific products.
If your first home needs renovations, the time is favorable to start them as the state has extended the tax deductions to 50% until December 31, 2019. If you want to take advantage of these benefits always pay close attention to the financing rates that you will consider and carefully evaluate if it is more convenient for your needs to rely on a loan or a mortgage.