Home Repair Loans
Whether an existing home has aged and needs repair work, or a new home needs some extras added to make it just right for the family, home repair loans may provide the necessary funds to get all the work done. Keeping a home in good condition year after year can be a challenge. Sometimes as homes age, major upgrades may need to be done all at once, and this can run into thousands of dollars for the homeowner.
Loans for Large and Small Home Projects
Funds from loans may be used for a wide variety of projects, not just major overhauls or construction jobs.
• Adding a new room is a common project that may require funding through a loan.
• The purchase of new furniture or replacing floors or carpets can run into thousands of dollars.
• Loans may be used for landscaping the property surrounding the home or building a swimming pool.
• Renovating kitchens and bathrooms present unique challenges that can be expensive.
Secured and Unsecured Loans
There are generally two types of home repair loans which are known as secured or unsecured. A secured loan is reserved for individuals who own their homes. These loans typically carry a lower interest rate as homes may be used for collateral; however, homeowners who are unable to repay their loans are at risk for losing their homes. On the other hand, an unsecured loan usually goes to individuals who own no property that can be used for collateral; however, the downside of unsecured loans is that they typically carry a higher interest rate.
Low income individuals may qualify for Title l government home repair loans, but there are a number of rules that are involved with using these kinds of loans. The maximum amount that can be loaned under Title l is $15,000 and the repair projects that may qualify include repair or replacement of roofs, gutters, downspouts, heating and conditioning, plumbing, electrical systems and flooring. These loans may also cover structural repairs, minor kitchen upgrades, exterior and interior painting, weatherization, new appliances and revamping for the disabled.
Things to Consider Before Obtaining a Loan
People who take out loans for home repair may want to consider purchasing some type of payment protection plan or insurance in the event an illness, accident or loss of a job hinders repayment of the loan. This type of insurance may prevent default of the loan. For individuals wishing to add value to their home, it is vital to do some research to make sure the improvement project really will add value. Some projects, like an upgraded kitchen typically add value while others, like a swimming pool, do not always add value to the home. Additionally, it is crucial that all improvement projects meet local zoning and building requirements and are up to code for the safety of those living in the home.
When completely applications for home repair loans, it is important that all information on the applications is truthful and accurate. It is acceptable to apply for multiple loans and choose the best deal out of any that are approved. It is also wise to compare interest rates as well as the length of the loan repayment period before signing a loan contract.