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Home Improvement Loan

Home improvement loans are home loans used to finance improvements on your house or property i.e. for home financing projects. These home loans are used to maintain or increase the value of your home. Usually these loans are taken after home purchase. This can include repairs, a new kitchen, a new bathroom, an extension or general property improvements. Generally, all actions that increase the value of the property in such a way that it increases the expected sales value of the home or the property are to be considered home improvements. Purpose of the home loan - improvement or extension of house:

» External repairs
» Tiling and flooring
» Internal and external painting
» Plumbing and electrical work
» Waterproofing and roofing
» Grills and aluminium windows
» Waterproofing on terrace
» Paving of compound wall.

Evaluating your home improvement loan options:

The foremost step is to sure of what type of home improvement you are considering. Your choice should be tailored to your purpose. You need to ask yourself certain questions:

» Are the improvements you plan to undertake increasing the value of your home more than the    loan you apply for?
» What will the monthly payments be?
» What are the tax implications?
» Possible tax deductions?

Types of home improvement loans:
Home Mortgage Loans - First and Second Loans:

Typically home improvement loans are given against your first mortgage by your current lender. Discuss the Terms and Conditions with the lender you already have, but be sure to get other quotes and to make a detailed comparison of your different options. Most commonly the loan is extended for the remaining period of the original mortgage, but you will have to discuss the terms in detail with your mortgage lender. Home improvement loans are usually paid out in payments in proportion to the work that is being carried out and the contractor may be paid directly from the lender. In other cases the borrower may receive the money or the loan only upon proving the payments to the contractor.

Home mortgage refinancing:

You also have the option of your refinancing your home mortgage. These loans define the meaning of home improvement- this is not a new home construction loan. This type of loan simply means refinancing your mortgage to lower your payments, defer payments or release some cash for home improvements.

Unsecured Personal home improvement loan:

A personal loan for home improvement doesn't require you to have equity in your home or borrow against the value of your home. This unsecured loan is the opposite of the home equity loan. Unsecured personal home improvement loans are loans disbursed by either a finance company or bank to finance your home improvement project.

Home improvement loans or grants by Government:

There are Government grants programs available offering financial help to low income families to repair current homes. The government aims at expanding home ownership opportunities and neighborhood revitalization.

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