Posts Tagged ‘home improvement loan’
Mortgage Underwater? No Equity Home Improvement Loan Options
As we all know, the housing bubble has popped. This has put stress on people who were hoping to use the increased financial value of their homes to perform some much needed home improvements. The downturn in housing values across the nation means there are many people who are now living in houses that have not built up any added value over the past several years.
In a rising housing market you can buy a house value one year and in the next year the value of the home will actually increase by a few percentage points from one year to the next. So if you bought a home for $150,000 five years ago it might actually be worth $200,000 now with normal economic growth. You would then be able to borrow money against that added value from a bank and use that cash to upgrade your house.
Today many people don’t have that extra home value which is known as “equity.” Most home prices have actually plummeted in the past year or so, which means a lot of people are now paying for houses that are now worth less than what they originally paid. When you owe more money on a house than what it is valued at then you are said to be “underwater” with your mortgage.
Fortunately you can still pay for home improvements even without having equity in your home. If you’re searching for a big home repair loan then you may want to think about applying for an FHA home improvement loan from an eligible loan partner. You do not have to have equity in your home to get an FHA Title I home improvement loan. Almost any one who owns a home can apply for an FHA loan and eligibility is less severe than most traditional lending institution loans.
For most home improvement jobs the largest expense often comes from the amount of manual labor involved, so by taking on some of that work yourself, you can really shrink the total cost of the overall project. There are lots of different do-it-yourself home improvement projects most people can do around their homes with just a little bit of know-how and a willingness to work. This is a great way to keep the costs of a home upgrade project down.
Most small home repairs can become large headaches if they are allowed to go unfixed for too long. If you have a serious home repair that needs to be done, don’t let your home’s dropping value prevent you from getting the money you need to make the improvements. And, as you can guess, big home projects always end up costing more than the little ones.