There are different loan products that you can obtain and can be destined to improving your property. Though there are home improvement loans specially tailored for that purpose, there are also alternative sources of income that can be used to and you should consider them all prior to applying for a particular loan product.
Different Loan Products
For starters, you can refinance your home loan for a higher loan amount than your current mortgage loan and thus obtain extra funds for undertaking home improvement projects. These loans are known as cash-out refinance home loans and can be obtained when you have sufficient equity left on your home. As long as your property’s value is superior to the current mortgage balance, you can request a cash-out refinance home loan and use that difference for financing home improvements.
If you don’t want to refinance you current home loan because it has good terms, you can still get finance from your home equity by requesting a home equity loan or line of credit. A home equity loan (second mortgage) is a loan that uses the equity (difference between your property’s value and mortgage balance) to guarantee the amount of money borrowed and has similarly advantageous terms to home loans.
Home equity lines of credit work likewise but are a revolving source of funds from which you can obtain any amount you need up to certain limit. Also, you can repay the money borrowed the way you want with minimum payments that usually consist only of interests. You can always withdraw more money when you need it as long as you don’t exceed the credit limit.
There are also unsecured loans that can be used for undertaking home improvement projects. These loans carry lower amounts than secured loan but there is no risk of repossession since no collateral is required. The interest rate charged is a bit higher and so are the monthly payments. Still, if the home improvement project does not require a high amount of money, they constitute the most simple choice since approval is fast and hassle free.
Online Lenders and Loan Comparison
The easiest way to obtain the loan you need is to search online for lenders after you’ve decided which loan type best suits your needs. You just need to make a quick search for cash-out refinance home loans, home equity loans or lines of credit or unsecured loans and many different lenders will be presented to you.