Homeowners looking to refurbish their houses but unwilling to use expensive credit cards to finance it will soon be served by a new, locally based loan company specializing in home improvement loans.
American First Mortgage Source Inc. will open Feb. 1 at 504 W. Mission Ave., in Escondido. Jess Chinchillas, founder of the company, recently returned to the county after serving as vice president for The Money Store, a Sacramento-based home lender.
“A lot of smaller home improvements are financed with credit cards,” Chinchillas said. “The interest isn’t even deductible (from income tax), while a home improvement loan is a deductible item that has a cheaper interest rate.”
The home improvement loan is secured by a lien on the subject property, he added. Since the average home improvement loan is smaller than other kinds of home equity loans, but has just as much paperwork, the points charged are usually proportionally higher, he added.
However, the loans are based on the borrower’s credit rating, not on whether or not he has equity in the property, Chinchillas said.
Chinchillas said he founded the home improvement loan department for The Money Store in 1994 and in five years the company became the largest home improvement lender in the country.
His marketing plan for the new firm will be to contact local contractors and building supply retailers to alert them to his loan products, so that they can inform the potential borrower, he said.
He and his seven-person staff at the new company will also offer traditional home loans, but the primary emphasis will be in making home improvement loans.