“There’s no place like home.” You’ve probably heard this old cliché hundreds of time during your lifetime. That’s because for almost all people, there really is no other place that’s more satisfying to dwell in than their own home. And what better way to enhance this satisfying experience than to make beautiful improvements to it.
Of course, home improvements are not only limited to the purpose of beautification. Sometimes, making upgrades simply becomes necessary in order to live a healthy and stress free life. For instance, if you’re planning to extend your family, i.e. bring a new member into this world, you’ll need an extra room for setting up a nursery. Or, there are times when your exciting kitchen seems simply too cluttered with all those added drawers with nothing to store in. Thus, one way or another, you’ll always have a need to improve your home for the better and here’s where a home improvement loan comes in.
What is a Home Improvement Loan?
To put it simply, a home improvement loan is a loan that’s taken out to back structural renovations, remodeling, or alterations to an existing residence. Generally, these loans are short-term, but they may extend for longer periods of time. Loans intended for home improvement are not necessarily protected through the property that they’re planned for and the lender can simply classify these as home improvement loans. These loans may be unsecured or secured.
Usually, home improvement loans are proposed for increasing the value of a home therefore, it is rather crucial that you carefully deliberate on where exactly you’re putting the money, i.e. where would it benefit you the most. And because all the money that you’ve spent on making improvements in the home is added to the overall cost of the house, you can easily recoup this expenditure if and whenever you decide on selling your place.
Considering Home Improvement Loans
When considering applying for a home improvement loan, there are always a couple of things you should think about. For example, is your home improvement leading to an over-building of the neighborhood? Making huge additions could transform your house into the best one on the block, though it will also make it the most expensive, and largest, making the selling part a bit difficult.
Another thing that you need to consider when obtaining a home improvement loan is the equity, i.e. the equity accessible for home improvements along with your budget limit. For instance, if the houses on your block (similar to yours) are selling for $120,000, and you invested $50,000 on your home 10 years ago, then you won’t face any issues when it comes to investing in repairs and upgrades.
Finally, you need to consider the fact that whether or not you’re getting the maximum out of your money. Research indicates that upgrades to baths, curb appeal, and kitchens lead to excellent returns over your investment. Thus, you have to ensure that you’re spending money where it counts the most.
Home Improvement Loan Options
There are several ways in which you can obtain a home improvement loan. You could borrow from a member of the family, seek loans that are FHA-backed, apply to local and state programs, obtain a loan from online or local banks, or from any of the big banks, attain a home equity account, or go for the 203K HUD (Housing and Urban Development) Program. You could also refinance your home to cash out the equity, using the same equity for the addition and remodeling payments. Though, a second mortgage or home equity account is an established tax-deductible method of improving a home along with increasing its value.
What Do You Need?
When applying for a home improvement loan, you’ll be required to provide the lender with the following items in order to obtain the loan:
- Proof of your income
- A credit check
- Itemization of probable costs associated with home improvements, i.e. labor costs, building materials, and an estimate of possible unseen charges.
Depending on your relationship with the local banker, job security, and credit ratings, you can find the perfect solution for making the necessary improvements to your home, increasing its value in the long run.
To start the process go to Compare Home Improvement Loans