Evaluate Your Home Improvement Financing Options

Although as the saying goes,”There is definitely no place like home!”, the time will come that your home could use some renovations, upgrades or improvements. Does your kitchen need more cabinets? Do you need more space in the living room? How long have you had the crack in the bathroom tile floor? When was the last time you had your roof repaired or replaced? If any of these situations give you reason to pause, it could be time for some home improvements.

If money is a concern, you should first evaluate your home improvement financing options. A home improvement loan can help finance the project or projects of your choice without paying for the whole project in one large chunk. The terms of a home improvement loan vary with each lender and also with the credit score of the borrower. Home improvement financing can be broken down into monthly or quarterly payments just like other types of loans. These loans can be extended for 5 to 10 years, but bear in mind that the longer the repayment period is, the higher the interest rate is likely to be.

Why should you bother to evaluate your home improvement financing options if you can make the repairs yourself? There are some home improvements that should not be done by non-professional persons and having your home improvement financed can ensure that trained professionals can be hired and enough money exists to get the job done properly. A home improvement project properly executed by trained professionals will greatly increase the value of your home.

A word of caution for you, financing professional home improvement projects isn’t cheap. There is, however, a value to financing your home improvements in this manner. The plus side is that you have the opportunity to stay in a home you always dreamed of and you have the ability to pay off the loan on more flexible terms.

As you begin to evaluate your home improvement financing options, look for home improvement financing interest rates that are lower than others on the market. Consider the value of your property, also called the equity. The more equity your have in your home the better your starting position. You can find home improvement financing in such places as your local bank, loan brokers, and society co-ops.

There are requirements for home improvement financing you must meet. You should be prepared to answer all of the following questions. Most places will ask if you have financial issues. Do you have existing credit loans from other companies? What is the status of those existing credit loans? What is the current status of your house mortgage? Do you have a regular income? Every company has its own rules and regulations. Those are just a few areas to consider begin the application process. The more preparation you can do beforehand, the better off you will be during the loan application and approval period.

Taking the time to evaluate your home improvement financing options can eliminate a lot of confusion. Do as much comparison shopping as possible and pick the lender that offers an affordable loan rate and legal credibility.

How to Obtain Home Improvement Financing

Whether you are renovating a bedroom or adding a patio deck, you are going to have to plan for the costs associated with the renovation. When planning a home renovation project, it is important to choose the right home financing plan that meets your needs.

Choosing the right home financing plan depends on the length of the project and how much you can afford to pay for the project, When you take on longer repayment terms, you will have to pay more because of the interest rates, however your monthly repayment fee will be lower. By determining the length and costs of the project first, you will have an easier time choosing one of the following home improvement finance plans:

1. Unsecured Loan: Often referred to as a personal loan, an unsecured loan is a loan that is not secured against your property, but against your credit rating. This type of loan is usually taken out for smaller projects. You can obtain a personal loan from a bank or lender. .The interest rates usually vary according to market conditions.

2. Secured loan: A secured loan is a loan that uses the assets of the borrower to ensure repayment of the loan. When you borrow money against your house or vehicle, the lender is guaranteed to retrieve its money if you fail to make the repayments.

3. Home Improvement Mortgage Refinance: Refinancing your mortgage at a fixed rate allows you to use extra money for your renovation project. The repayment schedule is usually for 20 or 30 years, or the term of your mortgage

4. Home Equity Loans: A home equity loan involves borrowing against the equity in your home. You can receive a lump sum to pay for your renovation project. Obtaining a fixed rate will make repaying the loan much easier. If you fail to make your payments, you are at risk of losing your home.

5. Home Equity Line of Credit: This type of loan works by giving you an open line of credit. This type of loan does not usually have a fixed rate so interest rates depend on market conditions. This type of loan is good for “pay as you go” renovation projects.

6. Bank Loans: Bank loans are usually taken out for small renovation projects as they have to be repaid within a few years. Make sure you check to see if you have a fixed rate loan so you will not be dependent on fluctuations in the market.

The following is a list of tips to help you obtain the best home improvement financing plan:

Know Your Final Costs: Before seeking home improvement financing, add up all the costs associated with the renovation project. Make sure you allow for unexpected costs.

Affordability: Make sure you can afford the repayments. Make a list of monthly expenses including your mortgage to make sure you have enough money to repay the loan. Determine the amount you can actually pay each month.

Compare Financing Plans. Don’t settle on the first renovation financing plan. Check with three or four different lenders to see if you can get a better deal. It pays to shop around.

Find a Reputable Lender: Make sure you obtain a loan from a lender that is known for its fair rates and honesty. Read the fine print for any home improvement financing plan. Make sure you know if you have a fixed or variable interest rate.

Because home improvement projects vary from person to person, there are many types of home improvement plans available. To acquire the best home improvement loan, it is important to do your research. No one wants to mistakenly add debt from a project that was supposed to add value to a home.