Apr 24
Author: Ken Charnly
Homeowners that are lacking the funding needed to have renovations done on their existing homes can take advantage of a home improvement loan. A home improvement loan can be used to complete an addition onto one’s home, to make necessary repairs to one’s home, or just to spruce up one’s environment. The benefits of a home improvement loan are twofold: while homeowners can use the extra funds to beautify their home, they can also increase the value of their home in the process.
Home improvement loans are available from various lenders. Homeowners will need to have a firm grasp on what their credit score is before they apply for a home improvement loan; the better one’s credit score is, the better the interest rate one will receive. Homeowners should review their credit reports: credit reports can be easily obtained from the three major credit reporting bureaus. All three credit bureaus, Experian, Equifax, and Transunion may have slightly different credit reports: that’s why it is important to check all three reports.
Home improvement loan interest rates vary from one lending institution to another. Homeowners may best benefit from working with a local bank that they are already using: established savings and checking accounts in good standing go a long way when one is applying for a home improvement loan. Of course, homeowners also have the option of applying for a home improvement loan online, but it is a good idea to communicate with a lending representative about loan terms beforehand.
Apr 24
Author: George Whittaker
Due to increasing house prices, many people now own property worth more than the outstanding mortgage. The difference between the current market value of your home and the amount left to repay on the mortgage is the ‘equity’ in your home.
If you are in this position you can make use of the equity without selling your home. This is achieved by taking out a loan secured on the property. The advantage of a secured loan is that the risk to the lender is reduced so the interest rates offered will be lower. You are also likely to be able to borrow a large amount over a longer period. Homeowners can therefore use the value of their property to obtain credit at more affordable rates, and will have finance deals available which would not other wise be an option. This could be particularly useful if you have a poor credit history, as you may only be offered very high rates on unsecured loans. The lender will view you as a lower risk if you can offer some security on a loan.
The lump sum obtained as a secured loan can be used however you like, but financing home improvements in this way is a popular choice. Alternatively you might use the money to repay other high rate debts.
As with any other type of loan you should take care to check the details and make sure you are getting the best deal available. There is plenty of choice on the high street from banks and building societies, but it is also worth looking at other sources such as internet companies. Internet loan comparison sites and mortgage calculators can help with research and making the application. When looking for a secured loan you will need to know the amount left to repay on the mortgage and some idea of the current market value of your home. You should also think about how you will repay the money. For example are you looking for a long term option to run alongside your existing mortgage, or can you opt for a shorter period.
Even though a loan for a large amount may be an option, it is important not to overstretch your finances. You still have to make the repayments and if you have problems with this then your home may be at risk.