Home improvement loans are loans used to finance remodeling, renovating, and improvements on your home. The main purpose for establishing a home improvement loan is to increase the value of your property. Home improvement may include:
· Remodeling
· Repairs
· New bathroom
· New kitchen
· Adding a swimming pool
· New landscaping
· Putting up an extension, example: an additional room
Basically, if the improvement will increase the overall monetary home value, then a home improvement loan would be a good choice. There are various ways to fund your home improvement:
· Refinance
· First mortgage
· Home equity loans / home equity line of credit (HELOC)
· Personal unsecured loans
· Government grants/assistance
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Home Improvement Loan |
What is it |
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Refinancing |
· Get a lower monthly payment
· The savings from the lower payment can used for home improvement |
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First mortgage |
· It’s a loan against your first mortgage
· Loan can be paid to the contractor directly by the loan lender |
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HELOC |
· Leverage the equity in your home to pay for the improvement
· Use the revolving line of credit it like a checking account or credit card, pay for items as needed |
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Personal unsecured loans |
· Goto any financial institution such as a bank, a credit union, or online and get a personal loan for home improvement |
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Government grants/assistance |
· Specially for low income families to renovate their homes
· For neighborhood revitalization and beautifying to increase home values
· Housing and Urban Development is the main source for home improvement grant assistance |
It is important before endeavoring upon your home improvement project that you have a detailed plan of action. Calculate the costs of the total project: doing it yourself versus contracting the wok to someone else. If you decide to do it yourself, take into account your expertise level (it might cost you more later to remedy any mistakes you make), material cost, and time. If however, you decide to hire a contractor: check credentials, ask for references, is bonded, insured (what is his liability limit), licensed, and get two to three written estimates and quotes.