Homes need updating. Aside from the cosmetics of tiles and paint colors, there are the basic, but necessary renovations that need to be taken care of as well.
From re-shingling a roof to weather-proofing your windows, major home improvement projects are a part of home ownership. Unfortunately, they’re also costly and there isn’t always room in the family budget for a full overhaul of the heating and ventilation system. That’s where home improvement financing comes in. Home improvement financing allows homeowners to borrow money. Sometimes the house itself is used as equity and in other situations, little to no equity is required. Keep reading to learn about the different types of home improvement project financing.
Home Equity Loan
The terms for any loan, including a home improvement or renovation financing loan, will vary depending on the borrower. If you have good credit, your mortgage is paid off and you’re willing to put your house forward as equity, then you can expect to get great rates payable over a period of months or years. You could even opt for a second mortgage, which will get you rates close to prime. However, while a home equity loan obtains for you a lump sum up front, remember that you’ll start paying interest on that entire sum right away.
Line of Credit
One of the easiest ways to borrow money is through a home equity line of credit. A line of credit allows you to only borrow as you need, therefore only paying interest on what you use. The rates, if your credit is good, are great and they’re often approved fairly quickly and painlessly.
Remodeling or Home Improvement Loan
Many banks offer remodeling or renovation-specific loan programs. These work by combining a construction loan with a mortgage and are based on the projected value of the home after you complete your project. You will most likely have to submit a building plan as well as a breakdown of all your project expenses. The bank then usually releases the money in increments, as the project progresses.
If your credit isn’t as good or you’re still building it, you may opt for a small amount of financing that will let you complete the project without being overwhelmed by debt. An example of this might even be store credit from a local store – just enough to purchase a new furnace or the materials you need to retile your floors.
If you have lived in your home for several years, now this is probably the right time for you to make some improvements. Minor or major improvement is usually needed to make your time at home more enjoyable. Besides, improvement will also add the value of your beloved home.
When improving some parts of your home, the budget that you own plays an important role. The amount of your money determines the coverage of your home improvement and surely the building quality. Commonly, people need much money when it comes to home improvement and it triggers them to obtain loan. If you plan to conduct the improvement but you don’t have a special budget to fund it, it is a good idea to consider obtaining home improvement loan. This type of loan makes your home improvement financing gets easier and gives you the peace of mind.
To help you obtain the loan in an easier way, here are some steps that you can do:
1. Determine the amount of money that you need for the project. The way you determine the budget that you might need is very easy, all you need to do is just checking the parts that you need to improve. After that, you can get help from a contractor to estimate the budget. Seeking help from professional helps you know the needed fund without wasting the time.
2. Once you have determined the amount of money that you want to borrow; now this is the time to find the right lender. Nowadays, there are many lenders offer home improvement loan as more people need a simpler financing option. When searching for a lender, make sure that you check the most reputable ones. Loan types, interest rates, and closing costs are some things that you should also check when searching for a lender. You can make use of the internet to view lenders’ profile and the service that they offer. This may take some times but the information that you get will make you decide easier.
3. Finally, you come to the last step of obtaining the loan. After choosing a lender who fits your need, now this is the time for you to apply for the loan. Mostly, lenders will require you to deal with the paperwork and then submit it to them. Applying for home improvement loan can also be done online today to save your time.
It is easy, isn’t it? Obtaining home improvement loan can be much easier today as lenders are trying to improve their service to the prospective borrowers. If you don’t have any experience in obtaining the loan, it is a good idea to seek assistance from the professional.