Home Improvement Financing and Loan Info

Except for the rare instance when someone actually finds a home that's exactly what they wanted and in mint condition, most homeowners will find that they'll have to maintain and regularly improve their property. Doing so keeps the property value of a home high and increases the opportunity for resale if you ever decide to move elsewhere.

Home Improvement Financing: DIY or Hire a Contractor?

When it comes to improving your home, there are really two methods that you can employ: you can do it yourself or you can hire someone else to do it.

Naturally, hiring an independent contractor to take care of the home improvements will cost more because of the man hours they must spend, but aside from that you won't see much of a different in cost; as long as you're doing everything right. If you go about the home improvements on your own it will be absolutely necessary that you don't skimp on necessary expenses. Don't buy second-rate alternatives just because they're a little bit cheaper. Remember that this is an investment for the future, and the longer any improvements last, the better off your pockets are.

Finding a Loan for Home Improvement Financing

As with any investment, paying out of pocket is generally the best option. But that's not always a possibility with home improvement financing, and if you find that your home truly needs improvements done now, it may be time to ask for a loan. You can find a lender from any of the typical outlets. Talk to banks; talk to private lenders. If your credit is strong they will likely be willing to lend you a loan.

One viable option is to seek out an FHA Title I loan. These loans can be used for any improvements that will in turn make your home more livable and usable. Think improvements to appliances, air conditioning, heating, or the water system. All of the aforementioned can be fixed with a FHA Title I loan. Luxury items such as swimming pools or patios cannot be improved through an FHA Title I loan. A few of the advantages of the Title I loan insurance program are as follows:

Can get a loan no matter where you live.
No security needed for loans under $7,500.
Title I loans do not disturb any mortgage or deed of trust you may have.
Loan can cover engineering costs and building permit fees.
You can get a loan if you are a home owner or have a long-term lease on the home.

Home Improvement Loans: Secured vs. Unsecured

Unsecured Home Improvement Loans: Unsecured loans are given to you based on your credit rating. If you have a history of paying your bills on time, you should be able to get approved for an unsecured home improvement loan. These are good because you don't need to offer up any type of collateral to the bank or lender when you receive your loan. Receiving a credit card more or less constitutes as an unsecure loan.
Secured Home Improvement Loans: Secured loans are a little more tightly regulated. You will need to offer collateral to the bank in exchange for a loan, and they'll keep that collateral until you pay off your loan. It's similar to simply receiving a loan for purchase of a home; the only difference being that you don't pay off the loan through mortgage payments but rather an ROI. These loans generally have lower interest rates than unsecure home improvement loans.