Financing Home Improvement Projects After The Credit Crunch
Do you want to go about financing home improvement? Does your kitchen need remodeling or do you want to add a deck to your house?
You can often finance your home improvements through your first lender as a rider to the loan. If you have significant equity in the home, you can get a second or home equity loan.
Seconds, also known as home equity lines of credit are your best bet for financing home improvement. However, it is more difficult to get these loans in the current economy because there has been a credit squeeze. Countrywide, which financed many second mortgages, failed as an institution.
Still, if you have decent credit and you can show that value will be added to the bottom line of your home, you should be able to go about financing home improvement projects that you wish to undertake.
Home improvement loans can include projects that maintain or increase the value of your home. Landscape improvement and the installation of swimming pools are often included in home improvement loan categories.
Before you even start to consider the financing home improvement solutions, you need to have a plan. You need to know exactly what you are trying to accomplish and have a good idea of what it is going to cost you. Talk to a contractor before you talk to the bank. Include in your figures an amount for builder’s cost overruns.
You need to ask yourself some questions before you apply for a financing home improvement loan. For instance, is the value of the upgrade worth more than the cost? If not, will the increase in satisfaction you derive from the upgrade be worth the additional monthly payments? Are there possible tax implications? Your property taxes may rise if you improve the home, but your income taxes may be lower based on your mortgage deduction.
If you are buying a fixer upper, you can often get a loan in excess of the actual value of the home with the condition that you use the additional money to build value into the home and make it habitable.
If you have equity in your home, you can sometimes take out a second.
You can also refinance your loan so that you have one mortgage that covers the original amount owed plus the new amount for financing home improvement all at one low rate.
Finally, you can finance home improvement with an unsecured loan, also known as a signature loan.
If you want to make significant upgrades to your property, get financing home improvement loans.