How to Finance a Garage
Garages vary significantly in cost based on style, size and location. For instance, you can spend around $10,000 to professionally install a new attached two-door garage, or spend less to simply repair your existing garage or build an unattached garage. It's also possible to spend more money if you want to use elaborate materials and designs.
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Instructions
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Approach lenders at your local bank or credit union before contacting garage installers to pre-qualify for a loan. Gauge the amount that lenders are willing to give you. For instance, if you are approved for a $15,000 loan, then adjust your garage budget accordingly.
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Address any credit issues, such as late payments or credit report errors. By improving your credit score, you can receive better financing terms, including a lower interest rate. Start reviewing your credit by obtaining a free report through annualcreditreport.com.
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Apply for a second mortgage, home equity or personal loan using collateral like your house. Be prepared to complete a loan application and demonstrate your source of income along with your current debt-to-equity ratio (amount you owe compared with amount you own).
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Explore financing options with prospective contractors. Some companies provide services and help facilitate financing, either in-house or through third party lenders.
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Provide a down payment, which will depend on your lender's requirements. Most lenders offer more favorable terms if you can provide a reasonable down payment, perhaps 10 to 20 percent of the loan amount.
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Tips & Warnings
Most cities and towns require homeowners to obtain a building permit before any construction can take place.
Avoid financing a garage through paycheck or car title loans, which generally carry triple-digit interest rates.
Disclose personal information selectively to lower the threat of identity theft. For instance, scam artists have established seemingly legitimate websites that mirror annualcreditreport.com to lure unsuspecting people.
