Best Home Improvement Loan Rate – 5 FAQ

As the name implies, home improvement loans are special loans that banks and other lenders extend to homeowners for the purposes of making improvements on a home. Improvements that are allowed can fall into any number of categories, including indoor and outdoor improvements.

In general, banks who extend these types of loans to customers would like the home improvements to be something that will increase – or at least maintain – the value of the home so as to preserve the home equity.

Borrowers can generally take out this type of loan from their current mortgage lender, or they can shop around to other lenders. The homeowner has no particular obligation to go with their existing mortgage lender when it comes to borrowing money in the form of this type of loan.

Of course, if you are looking to borrow money to make improvements to your house, you will want to shop around to try to qualify for the lowest-possible rate; shaving just 1-2% off of your loan interest rate could save you thousands of dollars in interest payments.

If you are looking for the best home improvement loan rate, here are the answers to 5 frequently-asked-questions (FAQs) about home improvement loans:

1. Do home improvement loans require that I put up collateral?

A: Many home improvement lenders require that you put up collateral, usually in the form of home equity. They may extend to you, for example, a 75% LTV (loan-to-value) loan. This simply means that the total amount borrowed plus existing mortgage balance together must equal less than 75% of the home’s appraised value.

However, some lenders do offer this type of loan without requiring that the borrower put up any collateral. It is important to shop around until you find a lender that is willing to agree to your desired loan terms.

2. Is there a minimum or maximum loan amount?

A: Most lenders will usually require a minimum loan amount of, for example, $5,000. And, there will be a maximum loan allowed, as well. For those lenders who require collateral in the form of home equity, the maximum can be easily calculated based upon the type of loan (e.g., 70% LTV, 75% LTV, etc.).

3. How do interest rates compare to credit card interest rates?

A: In almost all cases, interest rates for this type of loan are going to be lower than if you borrowed the same amount against a credit card.

4. How do I access the money?

A: You may be paid the money you borrowed in a single, lump sum. In other cases, you may be able to set up the loan payments to where you simply withdraw the amount you need, much as you would when using a credit card or writing checks.

5. Are these short-term or long-term loans?

A: In general, the best home improvement loans are relatively short-term loans. This is especially true if you decide to borrow the money on a borrow-as-you-go basis. However, if you choose to get a lump-sum type of loan, your repayment terms may be longer term, such as 5 or 10 years.

Consider these answers to 5 FAQs about h

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How to Get the Best Return on Investment for Your Home Improvement Remodeling Projects

A home improvement remodeling project can actually make you money in the long run. Also, there are returns on your investment that have nothing to do with financial gains. The most important thing about remodeling your home is that you should have something in the end that is more valuable to you than it was in the beginning. There are several ways to improve your ROI.

1. Choose the right home improvement remodeling project.

Select a plan that will make a big difference in the value of your home. The two most profitable changes are updating your kitchen and remodeling you bathroom. These are the rooms with the most cabinetry, fixtures, and appliances.

When someone wants to buy your home, they will be impressed by a modern, beautiful kitchen. They will also pay strong attention to a well-designed and nicely-appointed bathroom. Not only will these two home improvement remodeling projects add to your home’s money value, but they will increase its intrinsic value to you as well.

2. Do not make mistakes.

If you spend extra time and money doing the job, you may end up with a huge investment in the project. Your home improvement remodeling job will only improve your situation financially if you spend less doing the project than the value you gain from the results. Sometimes extra costs can run up when you make mistakes in doing the job. You might buy the wrong supplies, break the supplies you get, or install them incorrectly.

However, hiring a home improvement remodeling company will assure that the job gets done right the first time. It may appear that you are getting the job done for less when you plan it out to do it yourself. Yet, if you have many false starts and wasted materials, you will probably profit more from using skilled remodelers in the first place.

3. Make sure you finish.

Many people start home improvement remodeling jobs only to leave them half-completed. Perhaps they do not have the spare time to do the work required. They might not make the financial commitment to getting the job finished. Maybe they just lose interest in the project.

For whatever reasons, there are large numbers of homeowners who have partially done projects making parts of their homes nearly unlivable. If you have started a project and do not see an end in sight, it is probably time to hire a home improvement remodeling company to finish it for you. They can put their full concentration on the job rather than having to think about it after work like you do. There is no shame in seeking help; the only shame is in leaving your home in chaos indefinitely.

Your home will bring more money on the market if your home improvement remodeling projects are completed, and completed meticulously. If you have the skills, ability, time and desire to plan a project, start it and keep it going through to the end, you may be able to make that return on investment a reality. If so, you can make it better, both in the increased price your home is worth and in the value you get from you home while you live there. If not, it is a good idea to think about hiring a home improvement remodeling company to help you out.

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