Home improvement loans are loans designed specifically for funding an essential home improvement project. These loans may come in a variety of different types, but they all share the same common bond of being based upon the value of your home and serving to pay for improvements, renovations, and other projects that may increase the value of your home and property substantially.
To get an idea of the scope that home improvement loans can cover and how best to go about getting one, consider the information below.
Secured Loans
Home improvement loans are generally secured on the value of the your property. The amount available for you to borrow is generally subject to the equity that you've built up in your property and your ability to repay the loan. A home improvement loan is issued by the lender under the agreement that the amount of the loan is used to make various improvements on your home that will increase the market value.
Unsecured Loans
Unsecured home improvement loans are typically only offered at small amounts. These loans generally require that you have a long-standing relationship with the lender that offers the loan, and function more like a personal loan than a standard home equity loan.
General Loan Information
Typically a home improvement loan is offered as a secured loan, where the equity value in the house acts as security for the lender. The amount that you can borrow may be determined by the amount your improvements will add to the market value of your home, or may be based upon the total equity that you have.
These loans are generally offered at a much lower rate than personal loans, due in large part to the nature of the loan and the higher value of home equity in comparison to many other types of collateral.
Though many home improvement loans are similar to mortgage loans and may even use the same lender, they are still a separate loan and are repaid over a different period than the mortgage itself. Mortgage lenders are typically in favor of home improvement loans, because it leads to improvement on the home that they effectively own it until the mortgage is repaid.
Home improvement loans are typically available with loans repayment terms of between two years and twenty-five years, though this depends largely upon the amount that you' e borrowing and the lender who is issuing the loan.
Uses for Loans
Many projects can be funded with home improvement loans., such as new interior decoration, bathroom changes, purchase and installation of kitchen equipment, and room or building additions.
Loans may also be used for developing new spaces and rooms in your existing home structure, such as furnishing rooms in an attic or basement. You may also choose to use the loan that you take out for garden and landscaping improvement, or other projects that increase the value of your home.
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