Is Now An Opportune Time For You To Upgrade Your Home Such as Adding A Rental Unit or Other Improvements To Your Property?

Home Improvement ADU

With property values continuing to rise in nearly every California neighborhood, adding an accessory dwelling unit (ADU) continues to be way to increase the living space in your property and potentially increase the value of your home. So, is this the year you decide to make a big change and add an ADU to your property? Could you convert your garage to additional living space, add a “granny flat” or otherwise expand your home?

Decide what your goals will be for the ADU

Before you start the process of planning an ADU, getting the required permits, and obtaining financing, decide why you want to add it in the first place. Do you have family members who will move in once you have space for them? Or is your family crowded already, and could use the extra space? Each situation dictates a different timeline.

If you’re planning to add an ADU and use it as a rental, are you in financial need, or are your plans more along the lines of increasing your property value over the longer term? If you’re looking to increase your property’s value with an ADU, your project may not be as urgent as one which will accommodate family members or serve as a rental.

Your home value vs. the cost of the ADU

According to Zillow, home sale prices in the Los Angeles-Long Beach-Anaheim metro area are going to increase about 1.4% in 2020. This isn’t quite as much as Los Angeles proper, where home values are set to increase by 3.5%. With median sales prices in the metro area of $443 per square foot compared to the average cost of building an ADU at about $300 per square foot, you will increase your home’s value by about 50% — on average. ADU projects can vary in cost and benefit to your property, so all of these calculations can change.

Interest rates are predicted to hold steady for 2020

Fannie Mae, Freddie Mac, and other home loan corporations predict that interest rates will probably hold steady in the year to come. If you want to increase the space your home has for your family or add value to your property, 2020 can be an excellent year to start a home renovation project adding an ADU. Work with an experienced home lending professional to learn what your options are in an ADU.


Thinking of Remodeling Your Crib Anytime Soon? Consider a HELOC or Refinance to Upgrade Your Home. Find Out Which Improvements Add the Most Value

HELOC Renovations

Have you been thinking about updating or upgrading your home with a home equity loan, cash out refinance, or home equity line of credit (HELOC)? Every year, Remodeling Magazine conducts a survey of home remodeling projects that keep track of which home improvements can earn back your investment when it comes time to sell your home. While resale value isn’t the only reason you could want to upgrade your home’s appearance or amenities, before you sign your loan documents and get started with your remodeling project, you should probably know the types of projects that do add value, and be aware of the ones that don’t.

Which home improvements add the most to resale value?

According to Remodeling Magazine’s 2019 survey of home improvement projects, the average cost of a project was $63.4 thousand, and the average return-on-investment (ROI) was $37.5 thousand for 66.1% cost/value ratio. This comparison includes nearly every type of remodeling project you could think of, from master bedroom suite room additions to bathroom and kitchen remodels. 

None of the home remodeling projects surveyed have a 100% or greater return on investment, but the top improvement in 2018 and 2019 was an upscale garage door replacement. At an average cost of $3,611, the improved garage door returned over 97% at resale ($3,510). Replacing doors, windows, and entryways all averaged between 70% and 76% ROI.

A wood deck addition returned over 75% of its cost at resale, but composite decks: not so much. At an average cost of almost $20,000, they returned only about $13,200. 

If you’re thinking about doing your kitchen over, it’s worth considering the scale you’re willing to invest in. Major kitchen remodels costing over $130,000 returned less than 60% of their investment, while minor kitchen remodeling projects of about $22,000 came the closest to paying for themselves, at an 80.5% ROI.

You may be doing some remodeling projects for yourself, and your enjoyment of your home should always come first. Over the years and in general, home improvement projects that add more to the value of your home tend to fall in the “curb appeal” category, like landscaping, entry doors, window replacements, and new, upgraded garage doors. 

With home mortgage refinance rates expected to remain low for 2020, this year could be the time for you to consider making changes to your home. A mortgage loan and refinance professional can help you to find the right loan product to pay for your remodeling project.


Hurry Now! Start Restoring Your House That Has Seen Better Days Through FHA. You Can Also Opt For Loan Products By Freddie Mac Or Fannie Mae

Renovations through FHA (1)

Did you know there are California home loans that will help you not just to buy a home, but also pay for renovations? If you’re considering buying a house that needs some work, sometimes called a “fixer-upper,” or a “handy-mans special”, or a property that needs “TLC” aka “Tender Loving Care”, you do have options to pay for the work that it will need. 

What type of home renovation loans are there?

The best-known type of home renovation loan is the FHA 203(k) loan. This loan comes in two versions: limited and standard. The limited FHA 203(k) loan will pay for up to $35,000 in renovations, as long as they’re not considered to be luxuries by the Federal Housing Administration (FHA). A new bathroom isn’t a luxury, but a new swimming pool would be, according to FHA guidelines. 

The standard FHA 203(k) loan will pay for renovations over $35,000. In order to qualify for this loan, you will need to work with a HUD-certified consultant who will get bids and oversee inspections of the work. Both of the FHA 203(k) loans will pay for renovations on your primary residence. They aren’t available for second homes or investment properties.

Other home renovation loans include FannieMae’s HomeStyle loan, and Freddie Mac’s CHOICE Renovation loan. These loans require higher credit scores than an FHA 203(k) loan. You could potentially qualify for an FHA 203(k) loan with a credit score as low as 500 to 520, but you will need to make a down payment of at least 10%.

Don’t let a “fixer-upper” stop you from buying the home you want

If you find a home that you can afford in the neighborhood you want, but it needs upgrading or repairs, don’t pass it by until you’ve considered a home renovation loan like an FHA 203(k) loan. There are many California home mortgages which can pay for the purchase and renovations that can help you to move into the neighborhood you want to live in, and have a modernized live-able and enjoyable home with the upgrades/renovations and repairs, you want and need. These loans allow you to finance 100% of the renovation rehab costs.  All those costs are rolled into the loan.  You just pay your normal down payment on the purchase, the rest of the costs including renovation, permits, and holding costs during the renovation period are often times covered by the loan. So you start making payments when your home is move in ready. Contact Us here at California Platinum Loans to see how we can make your dreams of buying a fixer upper with a low down payment a reality today!