Owning a home is a dream-come-true for most people, but sometimes home repairs and maintenance can be a burden. Some repairs cannot be put off and home repair jobs must be done as they appear. If you do not have the money for major home repairs, a home improvement loan is your best option.
A loan for home remodeling provides access to cash that can be used to make renovations or additions to a private home. The loan can only be used to finance projects that will benefit the house or property. All the work done must be for the maintenance of the real estate or to increase its worth.
Home loans are usually short-term loans. The interest rate depends upon the lending institution and the personal credit of the borrower as well as the home value and home mortgage.
Purpose of the Home Improvement Loan
Cash from a loan for home improvement can be used for projects such as home repairs, new bathroom or kitchen, building a deck, landscaping, repainting, redecorating, updating plumbing, installing a swimming pool, adding a room, etc.
Acquiring a Home Improvement Loan
Private lending institutions offer these types of loans. There are also federally funded programs for this type of loan. You can speak with a customer service representative for information about acquiring a loan.
Before you go to a lender, be sure to have all the details of the project ready. You will need the estimated total cost of the project and quotations from potential contractors. You must also include the expected increase in home value, if applicable.
Home improvement projects can be financed through home equity loans or home equity line of credit. You may also opt for refinancing and unsecured loans. Veterans can apply for a VA Home Improvement Loan to upgrade their current home. This type of loan is backed by the Federal Government to lending institutions that offer home improvement financing.
Choosing a Loan to Finance Home Improvement
Each type of loan has its own advantages and disadvantages. It’s up to the homeowner to decide
which one suits their needs best. One of the deciding factors in choosing a loan is the interest rate. Secured loans with the borrower’s property as collateral generally have a lower interest rate.
For small home repairs you may want to take out a personal, unsecured loan. For major construction, however, it may be more beneficial to apply for a homeowner’s loan. You will find many lending institutions that can offer financing for a home loan. Obtain quotes from different lenders and choose the one with the best offer.