Home Improvement Loans the Easy Way
Your home is your castle. It is your place of solitary rest, security, and comfort. However, it is also outdated and in desperate need of renovations. What do you do? If you do not have the cash on hand to complete the work, you have either to borrow it or live with your home in the condition it is in. The latter option is never a good idea when you consider the fact that failing to keep up with the work your property requires ultimately causes it to lose value. That leaves you with borrowing by way of home improvement loans.
We believe the easiest and most cost-effective way to borrow money for home improvements is through a secured home loan. Understand that a secured loan is not the same thing as a second mortgage. It is a very specific kind of consumer financing that allows you to borrow against the equity in your home for up to 25 or 30 years.
Secured loans are attractive to homeowners because, among other things, they are fairly easy to obtain. As long as the consumer has enough equity to secure borrowing, a lender will provide the cash. Even homeowners with bad credit can obtain secured loans.
How the Process Works
Obtaining a secured loan for home improvements is a fairly straightforward process. It begins by determining how much you want to borrow and how much equity you have. To determine equity, run a property comparison search to discover the approximate retail value of your home on the current market. Subtract from that number the amount of money you still owe on your mortgage. The result is your equity.
The rest of the process is as follows:
- Compare Lenders â?? Once you know how much you want to borrow and how much equity you have, it is time to begin comparing lenders. Comparing secured loans is no different from comparing car insurance or energy tariffs. You are looking for the best deal by way of both interest and bank fees and charges.
- Calculate LTV â?? Part of your comparison will include what is known as the loan-to-value (LTV) ratio, usually expressed as a percentage. LTV determines how much of your equity you can borrow with a particular lender. For example, an 80% LTV says that you can borrow an amount equal to 80% of your equity.
- Ask for Details â?? Your comparison should yield a short list of lenders you are willing to apply with. Before you apply, contact each of them and ask for details about their loan offers. The details are critically important.
- Make Application â?? The last step in the process is to apply for a loan with the lender offering the best deal. The lender will need you to do certain things during the approval process; your complete cooperation will make approval that much quicker.
Once the consumer is approved, the funds are usually available within 24 hours or so. With some lenders, you can even pay an extra charge to have cash deposited directly into your bank account in a couple of hours. However, that is an unnecessary expense unless you are facing an emergency.
Obtaining funding for home improvements is not as hard as you might think. Home improvement loans secured against the equity in your property can quickly provide the cash you need at a great rate and with affordable terms. Start comparing loans today if your home is in need of renovations.
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