- 12
- Aug
Due to the crash in housing values across the nation there are a lot of people who are now living in homes that have not built up any added value over the past several years. This has put a strain on people who were hoping to use the increased monetary value of their homes to perform some much needed home improvements.
In a rising housing market you can buy a home 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 today with normal economic growth. You would then be able to borrow money against that added value from a lending institution and use that cash to upgrade your home.
Today many people don’t have that added home value which is known as “equity.” Most home prices have actually dropped in the past year or so, which means a lot of people are now living in homes that are now worth less than what they originally paid. When you owe more cash on a house than what it is worth then you are said to be “underwater” with your mortgage.
Luckily you can still afford home improvements even without having equity in your home. If you’re looking for a large home remodeling loan then you may want to think about applying for a Title I home improvement loan from an eligible loan partner. You do not have to have equity in your home to get a Title I home improvement loan. Almost any one who owns a home can apply for an FHA loan and eligibility is less restrictive than most traditional bank loans.
Another good way to keep the costs of a home remodeling project down is to do at least some of the labor yourself. There are lots of affordable do-it-yourself home improvement things most people can do around their houses with just a little bit of know-how and some elbow grease. For most home improvement jobs the highest expense often comes from the amount of manual labor involved, so by taking on some of that work yourself, you can really reduce the total cost of the overall job.
As you can guess, large home improvements always end up costing more than the little ones. Most manageable house repairs can become large headaches if they are allowed to go unaddressed 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 obtaining the money you need to make the repairs.
Want to learn about more ways you can qualify for specialized home improvement loans? There are lots of different home improvement loan options available for people with bad credit depending upon your credit score and home value.
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