The global lending industry has a diverse number of loans that anyone can apply for. All of these loans vary in privileges, popularity, interest rates, availability, and transactional nature. One of these popular debt instruments is the home improvement loan. Basically, a home improvement loan is a lump sum given to homeowners who want their homes fixed or renovated. If you want to have a portion of your home repaired yet you don’t have enough money, you can try some of the available home improvement loans this 2017.
Basic Home Improvement Loans
The basic or traditional home improvement loans are those ones issued by banks and financial organizations. Once you’re approved for a home improvement loan, the lender will give you a sizable sum that can be used for home repair. With this lump sum, you can complete different projects like room extensions, additional swimming pool, foundation repair, or total HVAC replacement. Home improvement loans are unsecured, so you don’t have to pay for any collateral. As a consequence, the interest rates are higher. The amount that you can borrow depends on your credit score.
Home Equity Loan
This 2017, the home equity loan seems a promising option. With a home equity loan, you need to pay lower monthly interest, but the repayment period is usually longer than traditional home improvement loans. The value of your home is also an important factor to your home equity loan. This will determine how much interest you have to repay for years. It’s very similar to a mortgage loan, except that it’s a bit lenient. At some instances, you almost can’t tell the difference. Another variant that you can try is the home equity line of credit or HELOC. With a HELOC, you’ll pay variably lower interest rates as you draw on your line of credit. However, once the draw period is over, the rates will climb quickly.
The cash-out refinance is a popular option that ‘extends’ your mortgage. Typically, it may be difficult for you to reapply for the same amount of your mortgage loan. With a cash-out refinance, you can reapply for higher amounts. The trick is to repay your mortgage then declare your cash-out refinance. You now have an extended loan which can be used for anything you want. The downside is that your mortgage repayment period will take longer.
Once used properly, home improvement loans can change the total quality of your life. If you’re creative, you can use these loans for different purposes. Just make sure that your purpose can maximize the value of your loan. Don’t waste your home improvement loan for luxuries or unnecessary things. To know more about home improvement loans, check out some latest global financial articles.