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Beyond The Mortgage: 4 Different Types of Homeowner Loans You Should Know About

Rising home prices, a restricted supply of new housing, and an incredibly sophisticated financial system have resulted in plenty of options for homeowners in the US. Whether it is to fund home improvement projects, invest in a second home, or merely unlock value on existing properties, there are a lot of innovative products, if used right, can substantially enhance individual and family finances.

While these offshoots of conventional loans and mortgages have been around for decades, many of them have only recently come to prominence, and still, a vast majority of homeowners remain unaware of their options. In this article, we dive deep into the workings and offerings of America’s $18 trillion mortgage industry, and how consumers can make the most of it under the prevailing market conditions.

  1. Home Equity Loans

Often referred to as a second mortgage, a home equity loan is a type of consumer debt, offered against the equity portion of the borrower’s property. Homeowners can borrow to the tune of 80% to 90% of a home’s appraised value, on a fixed-rate basis, with rates and terms depending on the borrower’s credit score, payment history, and monthly income.

This is similar to conventional mortgages, in that it offers a fixed repayment schedule, comprising both the principal and interest components. On non-payment or default, the property will be foreclosed to recover any pending dues, similar to most other mortgages. The interest rate tends to be on the lower side, since such loans are relatively risk-free for lenders, making them ideal for debt consolidation.

  1. Home-Equity Line of Credit (HELOC)

Similar to home equity loans, a HELOC is essentially a line of credit offered against the borrower’s equity on the property. This offers much more flexibility against traditional home equity loans, given that the funds aren’t dispersed lump-sum, but can instead be withdrawn as and when necessary. Borrowers need only pay interest on the amount withdrawn, and not the entire value of the line of credit.

Initially, borrowers need only pay the interest on what has been withdrawn, but once it enters the repayment period, higher payments will be necessary to include the principal amount. Such loans are often provided with a variable interest rate, which means that based on prevailing market conditions, interest rates on the outstanding amount can increase substantially.

  1. FHA 203(K) Loans For Home Renovation

When it comes to home improvement and renovation projects, the Federal Housing Administration offers plenty of assistance for lower-income households in the form of the FHA 203(K) loan. In a government-backed mortgage, the amount disbursed under this scheme is earmarked for the rehabilitation, construction, and repairs of the borrower’s primary residence.

While the above-mentioned options provide remarkable flexibility in terms of the purposes and intent of the loans, the FHA 203K is placed in an escrow account, and can only be released as and when the work is completed, directly to qualified contractors. There are further restrictions on the type of FHA home renovation, with certain luxuries and vanities not permitted, but on the whole, it adds plenty of value to lower-income households.

  1. Interest-Only Mortgages

As the name implies, these are mortgages where the borrower only pays the interest for the first couple of years, usually 5 to 10 years, following which both the principal and interest have to be repaid together. 

This can prove to be expensive in the long run and slows down the rate of equity creation, but for an astute borrower, such mortgages can provide the means to maximize current cash flows, with opportunities to sell, or refinance at a later date, before the principal component kicks-in.

Final Words

For homeowners, things have never been this good in terms of the number of options and opportunities available to them. For disciplined, and discerning borrowers, such unconventional types of mortgages stand to add substantial value to their finances in the long run.

Creative Ways to Style Modern Furniture Chairs in Your Home

Chairs are not just a want but a need in every home. Whether you’re working from home or additional guests, have come over. Chairs are the savior and blessing to space. Many different types of chairs are available on the market, but which one is right for your home? It’s important to consider style and comfort when selecting a chair, as you will likely spend a lot of time sitting in it. Here are some tips on choosing the perfect chair for your home.

Simple tips for a modern look

  • Choose chairs with clean lines and a minimalistic design. Avoid chairs with too much embellishment or busy patterns. An example of comfort with design perfection is the Aeron Chair from Herman Miller.
  • Select a neutral color palette for your chairs. Black, white, and gray are all great choices that pair well with many different styles.
  • Think outside the traditional dining room and use modern chairs in other areas of your home, such as the living room or bedroom. Creative placement can add visual interest and help achieve a more cohesive look.

Ways to style chairs with fabric

There are many ways to style chairs with fabric. You can use a single fabric to cover the entire chair or multiple fabrics to create a unique look. You can also add trim or tassels to the fabric for extra flair. Here are some suggestions to get you going:

  1. Use a solid-colored fabric to cover the entire chair. This will give the chair a clean, modern look.
  1. Use multiple fabrics to create a patchwork effect. This is a great way to add interest and personality to your chairs.
  1. Add trim or tassels to the fabric for extra flair. This is a great way to dress up your chairs and make them stand out.

Painted chairs – a pop of color

Painted chairs are a great way to add a pop of color to your home. You can use them as accent pieces in your living room or bedroom, or you can use them as dining room chairs. Painted chairs are also an excellent way to add personality to your home office. You can paint them yourself or buy them already painted.

Using different materials to create texture

When it comes to chairs, there are endless possibilities for creating texture. You can upholster a chair in plush fabric for a soft, inviting look or go for something more unexpected like leather or fur. For a modern twist, try using geometric patterns or bold colors. And don’t forget the little details- tufting, piping, and nailhead trim can all add visual interest to your chairs.

Mixing and matching styles

There are endless possibilities when it comes to styling modern chairs in your home. Get creative and mix and match different styles to create a look that’s uniquely yours.

One way to mix and match styles is by pairing a traditional chair with a more contemporary piece. For example, try pairing a classic wood armchair with a sleek metal and glass coffee table. The contrast between the two pieces will add interest and visual appeal to your space.

Another way to mix and match styles is to use chairs as accent pieces in your décor. For instance, place a pair of colorful upholstered chairs in an otherwise neutral room to add a pop of color and personality. Or, use a vintage chair as part of a gallery wall display. The possibilities are endless!

Conclusion

As with any design project, having fun and enjoying the process are important. Modern furniture chairs offer endless possibilities for how you can style them in your home. So use your imagination and try out different looks until you find the ideal one for your room.

Thou Swell is a lifestyle and interior design blog named for an old jazz tune, sharing home, garden, and entertaining projects and inspiration. Stop by to find an avant-garde mix of contemporary and traditional design curated with an eye for classic Southern style.

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SWELL SHOPPING: AN EXUBERANT BLUE LIVING ROOM IN SPAIN

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