Find out how a cash advance works, and you’ll see it’s great for instant yet relatively smaller expenses for personal or home use. But if you need bigger help for home improvements, there is a loan suitable for you.
You need to make improvements to your home but the cash to renovate, repair and decorate you house just isn’t there. An option that is available for home owners is the home improvement loan. This will allow you to make those upgrades to your home while not taking too much out of your pocket in order to do it. Contractors and other home improvement professionals do not come cheap, at least if they are quality workers. A home improvement loan can make the difference in getting the needed work done or watching your house deteriorate further. Banks will also give you the option of taking out a secured loan or depending on your credit history, allow you to take a loan with no equity being needed.
New homeowners are also eligible to apply for an unsecured home improvement loan that typically has a fixed interest rate for a length up to 15 years. Your income limit or household income are the main deciding factors in unsecured home improvement loans eligibility. Your income should not exceed limits set by the county in the area your property is situated. Property type and the kind of improvements you wish to make will also figure into the bank’s decision in the case of an unsecured home improvement loan. These loans are usually easily processed and are minimal documentation.
The second kind of home improvement loan utilizes the equity that is available in your property. Basically, you are taking out a loan on your home, securing the loan and lessening the risk for the bank to be out money in the event that you do not repay the loan. This is an additional loan from your original mortgage and since it is a secured loan the interest rate and terms are traditionally better than with an unsecured loan. The available equity of your property decides how much the bank will allow you to borrow. Usually, your lender will help decide the value of your home and will most likely send out an appraiser to do this. The amount of the balance you have on your mortgage, along with any other outstanding debts in your history also factor into deciding your loan package details. There are lenders who will go as high as 125 percent of your property’s total equity. Since you are borrowing against your property, make the decision to borrow a very serious and deliberate one. Do not go beyond your means by creating a payment that you will not be able to make. If you default on the loan, they can take your home away from you. Home improvement loans are best for making the major renovations needed but save the smaller projects for when you have the extra money.