Loan Programs for Home Repairs or Improvements
If you are considering any type of work on your home from kitting out your garage and turning into a gym to a completely new kitchen then a home improvement loan is probably the only way this will become possible. Tradesmen such as carpenters, electricians, plumbers, plasterers are an expensive addition to the overall remodeling budget but for many homeowners they have no alternative as their own skills are not sufficient.
Whilst most homeowners are eligible for a home improvement loan, if they do not have a good credit history, they may be required to use their home as equity for the loan. When a homeowner has only just purchase the home, they are still able to arrange a loan, subject to their status of course. Fortunately for the homeowner, an unsecured home improvement loan is available with a fifteen year repayment term if required.
The primary stipulation when applying for an unsecured home improvement loan is the income level of both the owners (where this applies) but the amount of the loan must not be higher than the amount allowed by the county law where the property is situated. Whilst the lenders do not hand over the money without making some checks first on the property and the applicant, these checks are just to provide some security for the lender and home improvement loans are processed quite quickly.
In essence, when a home improvement loan is secured against the property, the applicants are in fact using the spare equity in their property to finance the loan. This is not the same as your original mortgage; instead, it is an additional loan that is often easier to obtain and process compared to a regular mortgage and because the loan is secured against your home, it usually provides better interest rates and terms than unsecured loans.
Obviously the amount you are able to borrow will depend on the value of your home. This calculation is worked out using how much your home is worth, how much is owed and of course if there are other loans or debts, these will be included as well.
The next stage is to factor in all this information before a final figure they are prepared to lend is put before the homeowner. Although it is not set in stone, the amount they are prepared to lend will be based on a percentage of the property valuation but some lenders will actually lend as much as a quarter as much again as the property is worth.
A secured loan can be risky if you arrange to have a loan greater than you can comfortably afford so consider this carefully as you may end up handing your beautiful home over to the creditors. So when you borrow for home improvement, it is best to use it only for necessary repairs and make renovations or home additions only when you have the money to spare.
Whilst most homeowners are eligible for a home improvement loan, if they do not have a good credit history, they may be required to use their home as equity for the loan. When a homeowner has only just purchase the home, they are still able to arrange a loan, subject to their status of course. Fortunately for the homeowner, an unsecured home improvement loan is available with a fifteen year repayment term if required.
The primary stipulation when applying for an unsecured home improvement loan is the income level of both the owners (where this applies) but the amount of the loan must not be higher than the amount allowed by the county law where the property is situated. Whilst the lenders do not hand over the money without making some checks first on the property and the applicant, these checks are just to provide some security for the lender and home improvement loans are processed quite quickly.
In essence, when a home improvement loan is secured against the property, the applicants are in fact using the spare equity in their property to finance the loan. This is not the same as your original mortgage; instead, it is an additional loan that is often easier to obtain and process compared to a regular mortgage and because the loan is secured against your home, it usually provides better interest rates and terms than unsecured loans.
Obviously the amount you are able to borrow will depend on the value of your home. This calculation is worked out using how much your home is worth, how much is owed and of course if there are other loans or debts, these will be included as well.
The next stage is to factor in all this information before a final figure they are prepared to lend is put before the homeowner. Although it is not set in stone, the amount they are prepared to lend will be based on a percentage of the property valuation but some lenders will actually lend as much as a quarter as much again as the property is worth.
A secured loan can be risky if you arrange to have a loan greater than you can comfortably afford so consider this carefully as you may end up handing your beautiful home over to the creditors. So when you borrow for home improvement, it is best to use it only for necessary repairs and make renovations or home additions only when you have the money to spare.
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