Rate This:What to Ask about Home Improvement Loans
Home improvement loans are a great way to start those home improvement projects you've been meaning to do. Whether working on a small weekend-long project or a massive renovation, home improvement loans are your best chance to improve and raise the market value of your home without a huge up-front cost or hit to your savings. The top three lenders for home improvement loans are currently Wells Fargo, Lending Tree and Admirals Bank, and each offers various financing and repayment options to fit just about any home improvement project and budget. With so many options to choose from, however, finding the right loan can be tricky. Not sure which loan is right for you? Ask the following questions when comparing home improvement loans to ensure you find the right loan for every home improvement project!9 Active Questions | Add a QuestionYou may want to ask others, friends or family, who have done the same work on their homes to get a better idea. Another way to calculate costs is with online project calculators at websites like Home Advisor where you can calculate costs associated with renovation by materials and the size of your room.Most lenders will offer you three different ways to lend you money. A fixed-rate home improvement loan will give you an interest rate that will never change. It will neither raise nor lower. A variable-rate loan's interest can raise or lower. Another way a lender can lend you money is through a line of credit.Before you can select a loan option, you need a good estimate of how much it will cost to do the project. If you are hiring a contractor, try to get an estimate from them, but if you are doing it yourself, you'll need to calculate all the associated costs. You'll also need to account for unexpected additional costs, like repairs that need to be made you were not previously aware of or pest control. Nevertheless, the more you borrow, the more you'll have to pay back over time.With smaller projects (around $500+), a credit card that can help you cover those minimal costs will be your best bet. Some credit cards can even provide you with rewards for money spent on home improvements. For moderate-sized projects (less than $5,000) your best option would probably be to either apply for a personal line of credit or a personal loan with a fixed rate and term.For large projects, greater than $5,000, you can acquire a loan, either fixed or variable, that will go to the purchase of a fixer-upper and will cover the costs of renovation. You can also refinance your home and make improvements with one loan. Another option is to refinance in order to pay off a mortgage, in which additional funds can be used for the purpose of home improvement. Further, at banks like Wells Fargo you can get a home equity line of credit for around $10,000, with the option of changing between a fixed rate and variable rate.Before deciding on a bank and a home improvement loan, you'll want to know the interest rate before you agree to anything. If a variable rate loan offers lower interest it may be the best option for you if you plan to pay it off quickly. But a decent fixed rate loan might be best for you if paying over longer term.Websites like Home Improvement Loan Pros can help you determine your monthly payments on a loan through the use of their loan calculator which takes into consideration you interest rate, loan amount and term.If you have bad credit you can still get a loan with the FHA's 203(k) rehab mortgage option. Unlike most lenders, the FHA does not have minimum requirements for their loans. The down payment for this loan is around 3.5%. However, money cannot be spent on luxury items like pools or hot tubs.Many lenders do not have home improvement loans with set standards. By applying for loans with other lenders you may be able to negotiate with your preferred lender for a better offer. This will also give you a better idea of what is out there so you aren't in the dark when it comes to acquiring a loan.
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