Home Improvement Loan
Adding an extra room in your loft or just routine maintenance on an aging property is expensive and often the best way to proceed is by applying for a home improvement loan. Very few people want to attempt many of these home improvements themselves so tradesmen such as electricians, plumbers and carpenters will need to be employed.
Bear in mind that home improvement loans are just for that and as such two options are available; secured loans and those that do not require equity. A loan that does not require equity allows new homeowners to apply even if they just bought their home. Fortunately for the homeowner, a non-equity based financing arrangement is available with a fifteen year repayment term if required.
The eligibility for finance without equity can depend on the combined household income, which should not exceed the county limit where the property is located. The eligibility of the borrower, the property type and the improvements planned are all considered because this type of loan may only have minimal documentation and is relatively easy to process.
Remember a secured home improvement loan is using spare equity in your property but this course of action is not for everyone. The upside to this type of secured loan is it's available at more favorable rates of interest but is not arranged as a second mortgage on the property.
The lender will only provide funds for a secured loan based on the current equity available in your property. The lenders need to be assured that there is in fact equity in your property and that any loans already outstanding will not interfere with any new arrangement made by them if they agree to a loan.
After this has taken place, the lenders will put a package forward which may not necessarily be for the full amount the homeowner wanted. Usually, finance companies will lend you a percentage of the assessed value of your house but some lenders can lend as high as 125 percent of your home's equity.
Any loan secured on a property has a risk attached and that is especially true when the loan is large as payments can become difficult to make at which point the creditors can move in and take your home away. Do not arrange a home improvement loan if it is going to cause any financial strain especially if it is only for remodeling but restrict the amount to cover for important repairs or restoration only.
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Written by Abu Monsur
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Source: http://www.loanforshop.com/home-improvement-loan/
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