Home Loans Articles

Applying for a Home Improvement Loan

If it's time to update your home in order to be more conservative or make some much needed repairs, do you have the money to do them? If you do not, consider applying for a home improvement loan. Home improvement loans are acquired through most banks and are available to people with all types of credit. Some home improvement loans can even help you rebuild your credit score as long as you make your monthly payment in full and on time. Home improvement loans will help you make the repairs and renovations that will increase the value of your home tremendously.

Where and How Can You Use a Home Improvement Loan?

Use your new home improvement loan to improve the basic livability or utility of your property. The types of property that a home improvement loan can be used on are manufactured homes, single-family and multifamily homes, non-residential structures and for the preservation of historic homes.

Home improvement loans can be used for a multitude of things including kitchen or bathroom remodeling, renovations and repairs, installing new heating and cooling systems, and new roofing. It might come as a surprise to some that you may also use your home improvement loan for home extensions and even for purchasing fire safety equipment. You may not, however, use a home improvement loan to purchase and install luxury items such as swimming pools or hot tubs. Anything that is non-home related, such as debt consolidation, cannot be done with a home improvement loan either.

Interest Rates and Eligibility

The interest rates that come with a home improvement loan vary from bank to bank so make sure you ask about how much each bank's interest rate is when you are inquiring about this type of loan. Depending on what type of property you are looking to get the loan for, there are loan terms for up to 20 years. Once again, ask your bank.

People who are eligible to apply for home improvement loans are home owners or those who are purchasing a new home. Even if you are leasing a home, you can apply for a home improvement loan as long as your lease extends six months beyond the time that the loan must be repaid to the bank.

Before Applying for a Home Improvement Loan

Before you decide to call the banks and talk about the home improvement loans being offered, it would be a good idea to decide exactly what you are trying to accomplish. Call around and get quotes from professionals like electricians or any other professionals who you might hire to do some work on your home. Take a trip to your local hardware store and jot down the prices of products you may need. It wouldn't be a bad idea to also decide on the paint and carpet, if necessary; that way you will have a price in mind. Gather all of these quotes and prices up as they will help to determine how much of a loan you will need and will also help the bank get you the best deal possible. You don't have to be rich to have the best home on the block and the home of your dreams; you just need to know where to look and what to ask for.