Home Improvement Loan Options

Every loan is a risk, even when that loan is being taken out specifically to improve the property in which you live. Consider your options carefully before committing to large-scale projects, and secure estimates from qualified professionals for work you’re not doing yourself. Be realistic about timelines, and realize that whenever you begin major renovation on a home, unexpected events and unanticipated expenses can dramatically change the logistics as well as the cost. It’s rare that they don’t. You’ll want to keep such things in mind when considering home repair loans.

Total loan amounts, interest rates, and other terms available to you are largely determined by your credit rating and history. It’s often possible to secure home improvement loans with bad credit, but you may not be offered the full amount you seek or the terms you’d like. Don’t limit yourself to a single lender; try your local bank or credit union as well as exploring online options. Many credible online lenders offer remodeling loans on quite favorable terms, even if your credit is less than ideal.

While it’s possible in some cases to finance home improvement through home equity loans, most home improvement loans are unsecured personal loans. This means you’re not required to secure the loan through collateral – you’re not risking your property or anything tangible in order to get the loan. On the other hand, your ability to make the agreed upon monthly payments in a timely manner throughout the life of the loan will have a substantial impact on your credit rating, for better or worse. Like any loan, the terms and flexibility available to you when financing home renovations are largely shaped by your credit history. How you manage this loan then shapes your credit history going forward. This can make the experience both rewarding and a bit intimidating.

Considerations Before Taking Out A Home Renovation Loan

Most skilled laborers are honest, hard-working people who want to do right by you and your home, but there are too many horror stories out there to become overly comfortable or careless. Take advantage of local resources and ask for references whenever you’re inviting workers into your home. Legitimate professionals are more than happy to provide them, as well as verifying their membership in any local organizations formed specifically to guarantee quality and honesty.

Check with local government about possible permits or other paperwork which may be required, depending on the type of work you’re doing. While it’s rare for cities or counties to shut down efforts by individual homeowners to do normal home projects, you want to avoid unnecessary stoppages or potential fees and penalties. You don’t have to like the system, but you do have to follow it most of the time.

Speaking of government, one of the ironies of home improvement is that when you raise the value of your property by making it better, you’re often raising your own property taxes as a result. While that’s usually a worthwhile tradeoff, you’ll want to be prepared for a higher bill come tax time.

Finally, when everything turns out wonderfully, be generous with positive word-of-mouth for those who helped make it happen. It’s part of paying it forward and helping the next homeowner have the best possible experience with their unique projects as well. Or, if you did most of the work yourself, take a moment to appreciate the value and additional enjoyment you’ve brought to your home. Either way, well done.