- Unfortunately, there are dishonest contractors who are seeking to take advantage of unsuspecting homeowners. Be wary of signing any type of home-loan contract with a contractor who shows up on your doorstep and claims to be able to get you a low-rate loan for repairs that he suggests. Very often, these loans are misrepresented, and the contractor is actually being paid kickback fees by the bank. Not only will you owe more than you bargained for, but the work may never be finished, as the contractor moves on to the next house after being paid his fee by the bank.
To avoid these types of scams, always seek out your loan first, then hire a contractor. Ask for advice from friends and neighbors about who to use for home improvement loans, or call a mortgage broker you've used before or know about firsthand. A reputable Realtor may also be able to help you find a good mortgage broker. Remember: If a home improvement deal seems too good to be true, it probably is.
Friday, July 31, 2009
Home Improvement Loan Tips 4
Home Improvement Loan Tips 3
- If your home is worth more than the amount you owe for it, you have what is known as "equity" and may be eligible for a "home equity loan." Be sure to contact a reputable mortgage broker and shop around to get the best available rates. Rather than allowing several banks to run a credit check on you to give you a rate, a mortgage broker can verify your information and represent your loan needs to several banks at once, allowing you to choose the one that's most suitable for your needs. The broker will be paid by the bank, so she will have their best interest, as well as yours, in mind when arranging for the loan. Be sure to use someone you trust, preferably someone who comes highly recommended for her honesty and availability to answer your questions and who has a track record of closing on time.
Mortgage Brokers
Home Improvement Loan Tips 2
- If you want to purchase a home that is in need of repair, and you plan to live in the home right away, you will need to get a special loan called a 203k. This loan will pay off the seller and put estimated repair funds into an escrow account, where it will be doled out to the contractors a little at a time until the work is complete. The FHA-backed loan amount is based on the purchase price of the house, plus the estimated costs of repairs or renovations. Because it is federally insured and backed, lenders do not require that the property be repaired and inspected before the closing date of the loan, which is overseen by the federal Housing and Urban Development agency (HUD).
Contact your local bank or mortgage broker to request information on the HUD 203k home repair loan.
203k
Home Improvement Loan Tips
- In today's economic climate, banks are more reluctant than ever to provide credit to what they consider "high-risk" borrowers. Though interest rates on all types of loans are at an all-time low, and it could be a great time to borrow from your home equity, if you don't have a great credit score, you will have a tough time convincing lenders to give you a loan. The best thing you can do before looking for a loan is to monitor your own credit score, and do what you can, to increase your score before applying. Many online companies offer credit-monitoring services for a low fee, and if you have been turned down for a loan because of your credit, you may be able to receive a free copy of your credit report from one of the three credit reporting companies -- Equifax, Experian and TransUnion -- which most banks use to make their loan decisions.
To get the best rates, your score will need to be in the 800-900 range, though a good credit score is generally over 700, but even if your score is as low as the mid-600s, you may be able to get a higher-rate loan from banks that specialize in high-risk loans. If your credit score is 500 or below, you will need to take action to improve your credit before applying for any loan.
Mind Your Credit
Home Improvement Loan
First of all, determine the amount you need to borrow to complete your home improvements. Once this is done, call your trusted loan officer, or lender, and discuss home improvement loan options.
There are many loan options today for accessing your home’s equity and your lender should advise you on the one that will best meet your needs. Some of your options will consider whether you want to refinance your existing home mortgage, take out a home equity line of credit, or a fixed rate home equity loan to do your home improvements. Each home improvement loan option has different benefits and should be explored to find the one that is best for you.
There are many loan options today for accessing your home’s equity and your lender should advise you on the one that will best meet your needs. Some of your options will consider whether you want to refinance your existing home mortgage, take out a home equity line of credit, or a fixed rate home equity loan to do your home improvements. Each home improvement loan option has different benefits and should be explored to find the one that is best for you.
So what are you waiting for? You don’t need to call a realtor and sell your beautiful home, you need to call your lender and get a home Do you love your neighborhood but want more comforts out of your existing home? Is the thought of a room addition, a new kitchen, or new flooring appealing? If so, why not consider a home improvement loan instead of a new home.
Home improvement loans are a great alternative to moving. They are also a great alternative for using cash for your home improvements as the interest on a home improvement loan is tax deductible. So, what do you need to do to get started on a home improvement loan?
Wednesday, July 29, 2009
Best Home Improvement Loans
If you are willing to do a littlerefurbishment in your home and don’t have the finance for it right now, you should be looking for the best home improvement loans. By comparison these loans you are able to find out which accompany is offering the best interest rates and the mostaffordable loan.
When trying to refurbish such rooms as the kitchen or the bathroom the conveniences alone take a lot of money. The work that needs to be done is usually at a lower place the skills that most of us have and that is why it is a good idea to finance yourreconstructing using a home improvement loan. These are unsecured or assured loansthat have a fairly low interest rate and a short loan time.
All this entails that you can expect to be paying back the full add up with interests in five to ten years maximum. Depending on the amount you need, this will usually come up with an interest rate of 5-7% which is the lowest end you can find for home improvement finance. As home improvement loans are so popular there is quite a lot of rivalry between the lenders, and you can easily haggle off one or two percent of interests.
Commonly even the best home improvement loans are taken as unbarred loans, but you can also use your home equity to finance your remodelling. This means using the real market price of your house and deducting the add up that you still have a mortgage on. The amount that remains is your equity and that is the amount you can take a new loan against. Usually with home equity loans your interest rates are going to be much lower than withunbarred loans. You can be lucky and go as low as 2-3% interest.
Getting a Quote to Finance a Home Improvement Loan:
There is a lot of competition among lenders. One of the best ways of getting the best deal is to get quotes on line, which will enable the borrower to research the market and compare different lenders and interest rates.
Another way of getting the best low cost home improvement loan is to involve an reputable independent loan broker. These brokers will charge for their services but this cost can be offset by the amount they can potentially save a borrower by getting the best deal, since they are experts in their field.
Low Cost Home Improvement Loans
Home Improvement TV shows and 'home makeover' shows have left many people feeling that their home needs to be upgraded or redecorated in some way. Bigger projects, like extending the home to create a guest suite or teenage pad have also become very popular. However, renovations and repairs can cost a lot of money, aside from saving up, where can the money come from?
Different Loans to Finance Home Improvements:
Home improvement mortgage refinance:Refinancing a mortgage to raise the extra cash is an attractive option for many, since the interest rate can be fixed and the repayments can be made over 20 or 30 years. Bear in mind that the monthly repayments will be low but the accumulated interest over time can amount to quite a lot, making the renovations expensive in the long term.
Dealer financing:Some big hardware stores or home improvement stores offer finance to customers. This can be useful as all the items can be bought under one roof, such as kitchen or bathroom items or new doors or appliances. Check to make sure interest rates are competitive.
Borrowing from family or friends:This would be the ideal way of raising the cash. It is possible that family or friends may not even charge interest, but be sure to have a contract in place that everyone is satisfied with.
Personal loan:A personal loan is an amount of money borrowed from a bank, building society or some other lender. A lump sum will be received which will be paid off monthly. Interest rates are subject to market conditions.
Buying Your Home: Settlement Costs and Information
Table of Contents
I. IntroductionII. Buying & Financing A Home
III. Your Settlement Costs
 | Specific Settlement Costs |
| | Calculating the Amount You Need At Settlement |
| | Adjustments To Costs Shared By Buyer and Seller |
| | HUD-1 Settlement Statement |
Buying a Home
The homebuying process can seem complicated, but if you take things step-by-step, you will soon be holding the keys to your own home!
Nine steps to buying a home
- Figure out how much you can afford
- Know your rights
- Shop for a loan
- Learn about homebuying programs
- Shop for a home
- Make an offer
- Get a home inspection
- Shop for homeowners insurance
- Sign papers
Step 1: Figure out how much you can afford
What you can afford depends on your income, credit rating, current monthly expenses, downpayment and the interest rate. The calculators below can help, but it is best to visit a lender to find out for sure.
| | How much home can you afford? |
| | Buying vs. Renting |
| | Home Economics |
Need help with your downpayment and/or closing costs?
| | Homebuying programs in your state |
A housing counselor can help you figure out how to manage and pay off your debt, and start saving for that downpayment!
| | Find a housing counselor near you |
Step 2: Know your rights
| | Fair Housing: Equal Opportunity for All - brochure |
| | Real Estate Settlement Procedures Act (RESPA) |
| | Borrower's rights |
| | Predatory lending |
Step 3: Shop for a loan
Save money by doing your homework. Talk to several lenders, compare costs and interest rates, negotiate to get a better deal. Consider getting pre-approved for a loan.
| | Looking for the best mortgage: shop, compare, negotiate - brochure |
| | Let FHA help you |
| | Why Ask for an FHA Loan? |
| | Learn about interest only loans |
| | Avoid Predatory Lenders |
Step 4: Learn about homebuying programs
| | Homebuying programs in your state |
FHA loan programs offer lower downpayments and are a good option for first-time homebuyers.
| | Let FHA help you | ||||||||
| | HUD's special homebuying programs
|
Step 5: Shop for a home
| | Choose a real estate agent |
| | Wish list - what features do you want? |
| | Home-shopping checklist – take this list with you when comparing homes |
| | Homes for sale (including HUD homes) |
| | "Fixer-uppers" - home purchase and repair programs |
| | Manufactured (mobile) homes |
| | Build a home |
If you choose a home in a neighborhood with a Home Owners Association (HOA), be sure to request a copy of the HOA packet, so you can review before closing.
Step 6: Make an offer
Discuss the process with your real estate agent. If the seller counters your offer, you may need to negotiate until you both agree to the terms of the sale.
| | Making an offer |
Step 7: Get a home inspection
Make your offer contingent on a home inspection. An inspection will tell you about the condition of the home, and can help you avoid buying a home that needs major repairs.
| | For Your Protection Get a Home Inspection |
| | 10 Questions to ask a home inspector |
Step 8: Shop for homeowners insurance
Lenders require that you have homeowners insurance. Be sure to shop around.
| | Homeowners insurance |
| | 12 ways to lower your homeowners insurance costs |
Step 9: Sign papers
You're finally ready to go to "settlement" or "closing." Be sure to read everything before you sign!
Property Improvement Loan Insurance
Summary:
Under Title I, HUD insures lenders against most losses on home improvement loans.
Purpose:
The Federal Housing Administration (FHA) makes it easier for consumers to obtain affordable home improvement loans by insuring loans made by private lenders to improve properties that meet certain requirements. "Lending institutions make loans from their own funds to eligible borrowers to finance these improvements."
Type of Assistance:
The Title I program insures loans to finance the light or moderate rehabilitation of properties, as well as the construction of nonresidential buildings on the property. This program may be used to insure such loans for up to 20 years on either single- or multifamily properties. The maximum loan amount is $25,000 for improving a single-family home or for improving or building a nonresidential structure.
For improving a multifamily structure, the maximum loan amount is $12,000 per family unit, not to exceed a total of $60,000 for the structure. These are fixed-rate loans, for which lenders charge interest at market rates. The interest rates are not subsidized by HUD, although some communities participate in local housing rehabilitation programs that provide reduced-rate property improvement loans through Title I lenders.
FHA insures private lenders against the risk of default for up to 90 percent of any single loan. The annual premium for this insurance is $1 per $100 of the amount advanced; although this fee may be charged to the borrower separately, it is sometimes covered by a higher interest charge.
Eligible Lenders:
Only lenders approved by HUD specifically for this program can make loans covered by Title I insurance. Title I loans can be disbursed directly to the borrower or, if the loan is made through a dealer, the disbursement will be made jointly to the dealer and the borrower. While most lenders and dealers/contractors use this program responsibly, HUD urges consumers to use caution in choosing and supervising home repair dealers/contractors conducting Title I repair/renovation work. Previously HUD had reviewed some Title I dealer loans and discovered several instances of unscrupulous dealers/contractors performing shoddy work, falsifying documents, overcharging homeowners and use of deceptive advertising. HUD has taken new measures in an attempt to prevent further occurrences in dealer originated loans.
Eligible Customers:
Eligible borrowers include the owner of the property to be improved, the person leasing the property (provided that the lease will extend at least 6 months beyond the date when the loan must be repaid), or someone purchasing the property under a land installment contract.
Eligible Activities:
Title I loans may be used to finance permanent property improvements that protect or improve the basic livability or utility of the property--including manufactured homes, single-family and multifamily homes, nonresidential structures, and the preservation of historic homes. The loans can also be used for fire safety equipment.
Application:
Applications must be submitted to a Title I-approved lender. Our web site offers a searchable list of approved lenders.
Funding Status:
In FY 2006 HUD insured 4,711 Title I loans with a value of $101 million. HUD estimates that Title I loans made in FY 2007 may reach $105 million.
Technical Guidance:
This program is authorized under Title I, Section 2, of the National Housing Act (12 U.S.C. 1703). Program regulations are in 24 CFR Part 201. The program is administered by the Home Mortgage Insurance Division of HUD's Office of Housing-Federal Housing Administration (FHA).
For More Information:
Lenders may contact FHA's Home Mortgage Insurance Division at (202) 708-2121 for information about how to participate in the Title I loan insurance program. Consumers can register complaints about Title I lenders or contractors by contacting the Home Mortgage Insurance Division or State or local consumer protection agencies.
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