What are the options for finding a home improvement loan
Build the House of your Dreams
We have all dreamed of building a house that reflects our aesthetic sense and which resembles a house of our dreams. From stylish cabinets in the kitchen to beautiful windows and from classic flooring to the most wonderful color combinations, there are so many things that you would want to have in your house. However, whether you do not own a house right now or own a house which doesn’t even come close to resembling your dream house, you simply cannot dream such things unless you have a lot of cash in your hands.
The good news though is that there are options for home improvement loans which can help you build the house of your dreams. If you intend on buying a new property and then renovate it so that it reflects your aesthetic style or if you intend on renovating your current property so that it looks and feels more like your dream house, you can find ways of securing a loan which would be able to cover the costs of renovation.
New Property and Home Improvement Loan
If you do not own a property right now and want to invest in a house that is not in its best shape so that you can carve it into your own image, you would need to have enough amount in your hands to first acquire the property and then to make changes to the house according to your liking. This might seem like a tough task. However, its not that difficult seeing that the price of an unmaintained property would be lesser than the price of a well-maintained property and therefore, the cash needed to acquire the property would be less. This can leave you with space to actually acquire extra cash to spend on home improvement.
The only issue here is that any lender would be ready to give you a mortgage loan to acquire the property but that loan may not cover the cost of home improvement. For any agreement to come into place, you would have to give an application where by your mortgage doesn’t only cover the amount of the property but also the cost of the home improvement.
If you choose a property in which you can move in directly and the home improvement tasks can be done after you move in then you will find a lot of lenders who would be ready to give you a mortgage that covers 80-95% of the costs of buying the property and of the home improvement. However, if you choose a property in which you can’t move until the home improvement tasks are completed, you may find yourself short of lenders especially banks. You may think that banks might be your only source of mortgage loan, they aren’t the only option for mortgage either. You can find a few lenders who would be ready to cover around 70-90% of the price of the property at first and then give you a similar percentage for the renovation once it begins.
Personal Property and Home Improvement Loan
If you already own a property and want to get a home improvement loan so as to renovate it, you will find that there are a number of options available and each option has its own pros and cons. The options are:
Home Improvement Secured Loans
Secured loans are called secure because the lender has the security of the collateral. In case of a secured home improvement loan, you must have considerable equity to get the loan. The amount of equity would actually decide the loan amount that you will be able to borrow. The good thing about secured loans is that the interest rate on them is very low which makes repayment easy.
If the renovation costs won’t exceed 12,000 to 25,000, you can consider the option of personal loans. The interest rate may be slightly higher and the duration of repayment slightly lesser but you would still get the loan. You won’t need equity for securing this loan.
You can ask your mortgage provider to increase your mortgage in order to be able to renovate the house. This would prove the cheapest option of the lot but it might be a bit difficult to get your mortgage provider to increase the mortgage. In a case where another mortgage provider is ready to give you a higher mortgage amount, you should not hesitate in changing your mortgage.
Whatever you do, don’t consider short-term bad credit loans or credit card loans for home improvement as the interest rates on them are too high.