Home improvement is the fastest route to add value to your property. However, not all of us have the extra cash to just implement all of the changes necessary to make it happen. (Related topic: Clermont garage doors)
Nevertheless, there are a few steps that you can take to obtain a home improvement loan that will allow you to turn your house into the house of your dreams. Of course, if you have a decent credit and know where to look for the best deal, home improvement loans are rather easy to get, not to mention that they are highly valuable as a cash resource to serve the purpose of maintaining and upgrading your property.
If done right, a small investment can potentially add tens of thousands of dollars to the value of your home. And a home improvement loan will allow you to borrow the money to upgrade your property. Of course, you’ll have to comply with the terms designated by the bank, lender or other financial institution issuing the loan.
Make sure not to confuse a home improvement loan with a home equity line of credit or a home refinance loan, as the latter are forms of home loans more oriented towards mortgage loans. They’re longer, involve larger amounts of money, they’re not open-ended and they’re way more difficult to obtain.
However, home improvement loans and refinance loans or bank lines of credit share certain similarities. For example, home loans are usually secured using the liquidity in your home as capital (even if unsecured loans are an option). Furthermore, all of the aforementioned home loans depend on your financial status and the strength of your credit to get the best loans and the best terms.
Home improvement loans also offer a wide range of lending amounts – as low as $5,000 and as high as $100,000. The interest rates also fluctuate from a 3% low for borrowers with good credit and up to 18% or more for those with less credit. Depending on the loan amount and the contract terms, the payback time-frame can be as short as one year, or as long as seven years.
If you’re planning on making a home improvement loan application, you should know that these are typically vetted quickly: loans are approved fast and you can have the cash in your bank account within the following day or two after the approval. These loans are usually provided by banks, credit unions, and a growing number of online personal loan providers through a process that’s rather easy, as long as you follow the right steps.
1. Specify the maintenance or upgrade projects in which you will invest the loan money. Highlight how this will add value to your property and how this can have a positive impact.
2. Avoid asking for too much money, instead, make an assessment and budget exactly how much money your home improvement project is going to cost you. Then, make sure to ask for a specific amount that can cover those expenses.
3. Make sure your credit score is adequate for loan approval.
4. Beware of your home equity. Make sure to verify how much money you would pocket if you sold your home today.
5. Ask yourself if you really need a home improvement loan. Perhaps, planning your renovations and budgeting for it, according to your possibilities, might save you from the loan journey altogether, as you will be able to pay for your home improvement project by yourself.