Just like home loans, getting approved for a home improvement loan can take some time but doesn’t have to be full of hassles. There are not so many credit requirements for loan approval due to the secured nature of these loans and they are probably one of the cheapest financial products available on the market.
A Single Loan for All Your Needs
Renovating your rooms, repairing your interiors and exteriors, refurnishing, repainting, adding floors or rooms, tiling, fixing water, electricity or gas installations, in fact any purpose you can think of can be financed with a home improvement loan. The amount of money you can get through this kind of loans will even let you redo your home completely.
Nevertheless, the money obtained through this kind of loan has to be necessarily used to make home improvements. Any other use is strictly forbidden; Just like loans for first time home buyers, the loan contract can be annulled if the money is used for other purpose than the one specified in the contract and penalty fees can be applied.
Though there are some unsecured home improvement loans, most of these loans are secured loans. There are mainly two types to be found out there in the loan market: Mortgage Loans and Home Equity Loans. Basically home improvement loans are secured with the same property that will be improved with the money obtained from the loan. If the property is not being used as collateral, the loan will take the form of a mortgage loan. If there is an outstanding mortgage, then the loan will take the form of a second mortgage (a home equity loan).
As any secured loan, the interest charged is considerably low. That’s why secured home improvement loans are generally preferred over unsecured home improvement loans which are scarce. This implies that home improvement loans are easy to repay and thus, the income requirements are not that high either. Nevertheless, this depends on the amount of money you request and on the loan length.
Since these loans are either mortgage loans or home equity loans, the amount of money you can request depends on the property’s value and on the amount of mortgage debt due (if present). But your credit history and your proved income will also be taken into account when deciding how much money you’ll be able to request and get approved for.
There are many lenders out there offering loans for home improvement. Your options are varied: There are banks and traditional financial institutions, mortgage lenders and home equity lenders. There are also many online companies and online financial institutions not so traditional but equally capable of providing excellent financial products at very reasonable rates (sometimes even better rates than common lenders). Our suggestion is that you request loan quotes from many lenders and compare them in order to get the best deal.