Basics of a Home Improvement Loan

Home improvement loans can provide a tax deductible way for improving your home to look the way you really want it to, while increasing the value. There are typically no restrictions for home improvement, as long as they are within the boundaries of local building requirements. You have the choice of doing the improvement work yourself, or using a contractor.

With a home improvement loan, you get a fully amortized, fixed rate loan, which is placed in second position on the title of your home. This type of loan is usually paid to you as one lump sum. Another option is a line of credit on your home, which is based on a variable rate, and offers you the ability to draw money for making improvements as you need it.

There is no change in the terms your existing first mortgage when you take out a loan for home improvement. You have a choice of loan terms from 5 to 30 years. Any existing second mortgage must be paid off with the new loan.

There is no equity is required for home improvement loans. The maximum loan amount can go as high as 125% of the current value of your home.

Because the loan is essentially an equity loan or second mortgage, a major advantage is your ability to write off the interest on the payments.

Using home equity as a supplement for income. Some information for those faced with the need to use their home equity for personal cash out.

Using your home equity for home improvement. Which loan type is best for improvements, home equity loan, second mortgage, or a credit line?

Some Tips for comparing mortgage loan rates. Getting accurate mortgage loan rates on home loans, second mortgages and home equity loans.

What lenders look for in a mortgage application. Guidelines that lenders use to qualify applications for new home loans and home equity loans.