What You Should Know About Home Improvement Loans?
There is no place like home, so from time to time you may want to carry out a little home improvement work to this cherished place. It may be some original DIY work or major repairs that can either add more comfort and pleasure to your living or increase its value.
Tight in cash? No worries. Don’t let the shortage of funds hold you back, home improvement loan is here to help you out.
What is a home improvement loan?
Also called Title I property improvement loan in technical terms, a home improvement loan is insured by Federal Housing Administrative (FHA) to finance your home improvement work.
The maximum loan amount is stated like this:
- 7,500 dollars for a manufactured house on personal property,
- 17,500 dollars for a manufactured house on real estate property,
- 12,000 dollars per living unit for a multi-family structure and 25,000 dollars for a single-family house.
- To be eligible for this loan, you must have good credit history and prove ability to repay the loan.
- For a loan exceeding 7,500 dollars, you are required to secure it by a mortgage or deed of trust on the property.
What are the available types of home improvement loans?
There are two main types of home improvement loans you can use:
A secured loan
You are eligible for a secured home loan if you are a homeowner with a mortgage. This type of loan gives you two benefits: lower interest and less rigid requirement for credit history. Lenders are willing to take this risk because your property is used as collateral. They can take your home as a way of payments if you keep failing to pay off the loan.
An unsecured loan
You may apply for an unsecured loan if you do not own a home or property. You don’t have to use any of your property or assets as collateral to offer lenders as security, as a result, the interest rate is much higher.
How can a home improvement loan help you?
A home loan can cover any size of your home improvement work, be it the redecoration of the living room or the building of a loft conversion. You can use it to cover home improvement projects such as
- Buying new furniture
- Adding new flooring and carpets
- Renovating kitchens and bathrooms
- Building a swimming pool
- Adding new rooms or storey to extend your house
- Landscaping your garden
A home improvement loan helps you more than by providing you with funds, it also gives you the peace of mind.
- You don’t have to live in a specific area to get the loan
- You don’t need any security for loans under 7,500 dollars, except your signature on the note and a cosigner
- Your loan can cover appraisal fees, inspections fees, title examination costs, in addition to major architectural and engineering costs
You may want to consider these before applying for a home improvement
• Take our payment protection plan on your loan. This plan protects you against unexpected or unforeseen circumstances that can have an effect on your ability to pay off the loan, such as unemployment, death or accidents.
• Make sure your property can add value after the improvement, which is especially important if you want to add value to your house.If not, you may want to think twice before taking out the whole loan plan.
Secured home improvement loans are the first means homeowners would think as to make improvements to his home. Also known as rehab loans, they are a type of personal loan you would take out so you can have the cash you need on your home improvement.