How To Find A Home Improvement Loan With A Poor Credit History!

My kids were all grown up. The last had just moved out into their very first apartment and I was spending my weekends fixing up the years of abuse a family of five can leave on a forty year old home. One thing that definitely needed updating was our kitchen. After taking out student loans and spending so much money on school tuition's I was pretty much broke. Neither I or my wife had good credit, so it seemed that getting a traditional loan to help pay for some home improvement projects was a long shot. That was before I learned that there are actually lending companies who will work with people with low credit scores. The key is meeting their requirements.

• Before you apply for a bad credit home improvement loan, see if there's any way you can improve your credit score, especially if it is below 600. If you're just under 600, by raising it just over 600 you could improve your interest rate by 3%.
• One way to secure the loan is to offer some type of collateral or security. Often this is any piece of valuable property like a vehicle title.
• Many people create their own grants for home improvement by tapping into their home equity. You can use this as either a line of credit or as a lump sum amount.
• Lenders will work with people with poor credit scores if they can find someone to cosign on the agreement that has a good credit score.

Bad vs. good credit

Bad credit home improvement loans are inevitably going to have higher interest rates. The purpose of credit scores is to create a basis for lenders to understand the risk involved in offering you a loan. So people with low credit scores are considered a higher risk of not paying back the loan entirely. When you borrow money, only borrow what you need for the home improvement project. Even if they are willing to offer more money, keep the principal balance of the loan small.

Using your home equity

If you want to tap into your home equity just be aware that these loans create a second lien on your property. If you end up defaulting the home improvement lender can take over possession of your home. However, if used properly home equity is an excellent choice for home improvement projects. I ended up using some of my equity to fund the home improvement of my kitchen. I even learned along the way that home equity loans are tax deductible, and I think my next project will be some solar panels. I hear the government offers tax breaks for people who make "green" additions to their homes.

I was fortunate to get great help from the good people at www.real-estate-yogi.com. Not only did they introduce me to loan brokers who helped me choose a method to pay for home improvement, they also taught me how to find a good contractor for home improvement. Call them today for a free consultation at 1-800-987-1397.

Improving Your Home With The Aid Of Loans!!

We had a young couple named Jon and Lucy moves into the house next door this past year. This house had been on the market for a number of years and it definitely needed a little bit of work. The last family had lost it to foreclosure during the housing crisis, and nobody had been taking care of it for at least a couple years. Naturally it needed a home improvement project and when Jon came to me for advice on the matter I admit I was a bit baffled. I began researching how young couples can find home improvement loans with no equity. Here is what I found.

Home improvement loans can often be found through the FHA with many programs for various income levels available. There are certain guidelines that need to be met however and it usually requires some sort of credit check.

• Home improvement lenders offer loans for all scales of home improvement projects. It could be a loan to remove old, ragged carpets, or loans to make major additions like new rooms or an updated septic system.
•  The smart borrower will have a specific goal in mind that will both update the house and make it more valuable. Good examples are homeowners who make "green" additions to their homes. These can often provide major tax breaks and save on utility bills.
• Home improvement financing for contractors can often be very expensive. Speak with your home owner's insurance company about available contractors in your area and find out the specific costs associated with your project before seeking any kind of loan.

Home Improvement Loans vs. Home Equity Loans

Regardless of the possibilities presented to Jon and Lucy, accessing unsecured home improvement loans could prove to be difficult. To receive home improvement loans the loan needs to be used to make improvements on a piece of property owned by the borrower. Often the homeowner should make an effort to prove that the improvements will increase the overall value of the home. Examples might be remodeling projects, decks, pools, room additions etc. Jon was looking to add a new roof and deck to the home since the old one was in a certain amount of disrepair. I felt he had a good chance at securing a loan if he could find the right contractor and price.

Since Jon was a young homeowner and hadn't been paying a mortgage there wasn't much equity to work with. If he could have acquired a home equity loan he'd be able to deduct the costs associated from his taxes. A general home improvement loan is a personal unsecured loan designed for short term use. Many homeowners like the fact that they don't have to tap into their equity to secure a loan. Home improvement loans also take less time to process than home equity loans. The interest rates are typically fixed with low monthly payments that can be paid off within 3-5 years.

What are your options?

However, the interest paid on a home improvement loan is not tax deductible like home equity loans. Because it is an unsecured loan it attracts borrowers with lower credit scores. It can be more difficult to acquire a basic home improvement loan with poor credit scores because lenders will often try to persuade the borrower to use their equity instead.

Get out your home improvement loans calculator today and see what options best suit your financial situation. Visit www.real-estate-yogi.com and speak with a representative any day of the week for free. They will guide you through your home improvement financing options. 1-866-987-1397.