Home Improvement Loans – 7 Tips You Should Consider When Getting Home Improvement Loans

From time to time it becomes necessary to acquire home improvement loans to help you “upgrade” your house. Whether you are renting the house out to tenants or you live in the house yourself, home improvements always add value to the property.

There are many home improvement loans you may decide to go after depending on your circumstances such as your credit score and the amount of down payment you may have. You also need to check on other requirements of the type of loan. Here are 7 practical steps you can take to get a home improvement loan approved.

1. Know How Much Money You Need to Get from Lenders.

Determine which areas of the house need improvements. Get contractors to give you an estimate of what needs to be done and how much it will cost to have them done. This will give you a rough idea of how much you need to borrow.

2. Documentation.

Put all the needed documents that lenders require together. These usually include tax returns, prove of employment, income in the form of bank statements and other data such as your debt-to-income ratio.

3. Know Credit Rating.

You are entitled to a free credit report from the credit reference agencies each year. So request a copy of your report. Go through carefully and if you see any mistakes, file a dispute with the appropriate agency to have the mistake removed. This would improve your credit score.

4. Look for Appropriate Lenders

Look for reputable lenders to borrow from. Know the average interest rates and the rates at which you are being offered the loan. Stay away from lenders whose credibility you cannot establish. If their offer is too good to be true, they probably are. If you make your application online, protect yourself against identity theft.

5. Home equity loan or home equity line of credit?

Each of these are somewhat like a second mortgage. Which one you go for is entirely up to you. A home equity loan is a lump sum of money with a fixed interest rate. It is based on the equity of the home you want to make improvements to. On the other hand, a home equity line of credit has a variable interest rate based on the principal (i.e. loan amount). A home equity line of credit is similar to a credit card, where you pay interest on the amount of money you take from the line of credit, calculated every thirty days. Talk to your banker if you do not understand any of these fully.

6. Understand Everything Before You Sign.

Unfortunately, many people never read the fine print because it is time consuming and boring to read. However, the little time you spend reading the terms of service of the lender is nothing compared to the money you will have to pay if you did not understand something and signed anyway.

7. Create a Budget.

Getting a home improvement loan means you are getting a second mortgage on your house. If you default you stand to lose your home. So create a budget to ensure you make your payments on time without any defaults. It will let you know how much money you can afford to put towards making repayments.

These are some of the best steps you need to consider when you are preparing to get a home loan meant to help yo improve you house.

The Number 1 Home Security Mistake

There are many home security mistakes that we all make. This includes the obvious mistakes that most of us know better than to try, such as putting a spare key under a doormat, to mistakes we know we ought to avoid but still do, such as not activating our alarm systems when we leave the house for only a short period of time or not putting lamps on timers to make it look like we’re home when we’re not. It even includes less-well-known items (that I strive to make people aware of) such as improving the quality of the windows, doors, locks and even the strike plates on our door frames, all which help tremendously to keep burglars out of our homes.

All of these mistakes should be avoided and improving any of them can go a long way toward feeling safe at home.

There’s an even bigger mistake

But, there’s still one more big mistake that people make. It’s a mistake that I think is bigger than any of the ones mentioned earlier! It’s more important than any others! This #1 biggest mistake? Assuming that it won’t happen to you.

No one is completely immune

There is no city, community or neighborhood that is completely immune from crime. There are definitely some that are safer than others, but burglaries can and do happen anywhere. Since there is some randomness as to whether you’ll ever experience a break-in, be prepared under the expectation that it can happen to you, rather than living under the false assumption that it won’t. Living in a “safe neighborhood” doesn’t mean it can’t happen to you. It only means that it may be less likely to happen to you.

This mistake arises from the assumption that it can’t (or won’t) happen to you just because your neighborhood is “safe”.

If you’ve ever put off thinking about home security because you live in a safe neighborhood, you’re not alone. But don’t put it off any longer. Your safety is too important!

Be aware of what goes on in your neighborhood

Have you ever done any checking around to find out just how safe your neighborhood really is? Thanks to easy internet access to almost anything, it’s not at all difficult to do some quick research into crime rates in your neighborhood. Crime can and does happen anywhere, so don’t let a few reports of crime shatter your view of your neighborhood. But you should be aware of what goes on around you.

Periodically check community, city or regional web sites, talk to neighbors, look at crime reports and neighborhood crime rates published by local police departments. Don’t be oblivious to what’s going on around you and as a result, not do much to protect yourself against crime.

With the economic mess we’re in, crime is up almost everywhere. Even safe neighborhoods are more vulnerable now. There are more desperate people out there.

If you live in a safe neighborhood, congratulations! Take full advantage of the comfort that can provide. But be cautious about not being lulled into a false sense of security!

Doing a Home Improvement Project Yourself-Yes or No?

After you have defined your home improvement project, the thought of doing the project by yourself or with a “HANDY” friend or neighbor may cross your mind. DO-IT-YOURSELF projects are a popular trend in the Home Improvement Industry. However, before you put on your tool belt, you should look at all aspects of your project and ask yourself the following 10 questions.

1) Do you have reliable work habits? Do you tend to stress out easily, lose your temper, or become confused under pressure?  Will you have the patience and persistence to complete the project in a timely fashion? What will happen if it is not completed in a timely fashion? 
2) What will you do if your project goes awry? Remember most contractors are wary about completing and/or redoing someone else's mistakes, including yours. 
3) Are you attempting to do the project yourself for financial reasons? If so, have you looked at the entire cost, including the cost of materials, your time, and the tools you may need to purchase, and then possibly never use again? 
4) What happens if you make a mistake and have to spend more time and effort to correct it? How much money are you really going to save then? 
5) Do you know all the construction steps involved in the project? For most projects this is not the time to be using an installation manual. 
6) How many projects of this type have you done? I hope at least 1 project.        
7) Do you have the skills to complete this project? For most projects this is not the time for on-the-job training.  
8) Is it safe for you to do the project? Some projects can cause serious injury or be fatal if proper precautions are not taken. 
9) Are you familiar with the local building codes and permit requirements? If you do not follow the building code you may be forced to tear down the project and rebuild it to meet the proper code specifications. 
10) Do you have the time to do the project?

If your answers to these 10 questions still leave you feeling comfortable about doing your project, than I would say go ahead! However, if time is of the essence, it normally takes a “Do-it-yourself” project longer to complete because most people are not familiar with all the “nuances” that one would learn from doing the project more than once. Think long and hard about doing a project yourself, especially if it is a large project. Large projects require more time and effort and are usually best left to a professional.