Home Benefits/Eligibility Credit Line/Equity Loan Common Problems HUD Loans
				Benefits of a Home Improvement Loan Home Improvement Loan benefits generally include the following: • No collateral is required from the applicant as long as they have a home identified for improvement. • The smallest amount of loans tend to be no less than $5,000, which is more than enough for most smaller projects. Bigger projects tend to average $10,000 to $25,000. • Home Improvement Loans tend to be cheaper for the consumer in borrowing cost than using credit cards, mainly because the interest rates are low and fixed. • Tax deductions are allowed for borrowing costs associated with Home Improvement Loans. Especially when they are attached to the home such as a 2nd mortgage, the interest paid is considered tax-deductible and reduces income taxes owed by the borrower annually. Eligibility As noted earlier, Home Improvement Loan borrowing eligibility is primarily based on your home ownership status. If you have a detached property that consists of a one to four-family dwelling capacity, and it has been in existence at least for a year, the criteria are met. Of course, borrowers also need to have met various credit worthiness criteria such as a good credit report rating and verified income streams. This is typical of any consumer loan. With regards to the structure, all the parts improved upon have to be connected to the property the loan involves. Most home improvement loan reviews will not allow disconnected structures to be part of the same loan. This is primarily due to risk and differences in appraisal values. The lender wants to make sure the loan goes to improving the home that was detailed on the application. Some exceptions are made if the particular home involved has been significantly removed or destroyed but the foundation system remains and the loan is intended to build again on the same spot. However, those are unique circumstances and not common practice. Conversions are allowed. Many times loans are provided to allow for rehabilitation and change smaller units to bigger, multiple family-dwelling units. The opposite can be funded as well where a structure is going from multiple units to fewer or one large unit. Previous - Introduction / Home Page Next - Line of Credit vs Equity Loan