Home Improvement Loan

A home improvement loan is money lent to a property owner for home repairs, updates or remodeling. Home improvement loans are not necessarily secured by the property they are intended for and may simply be classified as home improvement loans by the lender. These loans can be secured or unsecured and are usually short term.

Home Improvement Loans Home improvement loans are intended to increase the value of your home so it is important to think carefully about where best to put the money. After all, the money spent on home improvements is added to your overall cost of the home and you want to be able to recoup this cost if and when you decide to sell.

Things to Consider about Home Improvement Loans

1. Are you over-building for the neighborhood? Adding a huge addition could make your house the nicest on the block but also the largest and most expensive, making it potentially harder to sell.
2. How much equity is available for home improvements and what is your maximum budget? If you paid only $50,000 for your home ten years ago and now similar homes on your block are selling for $120,000, then you will have no problem investing in updates and repairs.
3. Are you getting the most for your money? Research has proven that upgrades to kitchens, baths and curb appeal offer an excellent return on your investment. Make sure you spend the money where it counts.

Ideas for Home Improvement Loan Projects

The improvement possibilities for your home improvement loan are almost impossible to calculate. While there are many decorating and design improvements possible, here are a few that are good to consider.

1. Additions - If you have a 2 bedroom, 2 bath house, consider adding a third bedroom. Similarly, if you have a 3 bedroom, 1 bath house, consider adding a second bathroom. And last but not lease, if you have a 2 bedroom, 1 bath house, consider adding a master suite complete with his and her closets and a full bathroom.
2. Updates - Concentrate on bathrooms and kitchens when spending the money from your home improvement loan. Kitchens and bathrooms seem to get outdated so quickly so it is important to use classic design concepts and soft, neutral colors. The lime green bathtub was a hit in 1975 but now desperately needs to be replaced.
3. Curb Appeal - Basic improvements such as landscaping or exterior painting can make a huge difference in the overall perception and value of your home. Keep these projects in mind when setting the budget for your home improvement loan project.

While the goal of your home improvement loan is to make repairs or upgrades to your home, the challenge is to make that money go even further, raising the value of your home above and beyond the level of money spent.

For more information on home improvement loans, please visit our Home Equity page.

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