As we all know, the housing bubble has popped. This has put stress on people who were hoping to use the increased monetary value of their homes to perform some much needed home upgrades. The crash in home values across the nation means there are many people who are now living in homes that have not built up any added value over the past couple years.
In a growing 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 $180,000 five years ago it might actually be worth $190,000 now 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.
These days many home prices have actually plummeted 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 money on a house than what it is worth then you are said to be “underwater” with your mortgage payments. This means they don’t have that added home value which is known as “equity.”
If you’re looking for a big home improvement loan then you may want to think about applying for an FHA Title I home improvement loan from an eligible loan partner. There are lots of sellers of these kinds of loans, they offer a competitive interest rate and you may be eligible to pay it off over a generous 15 years. Just about any one who owns a home can apply for an FHA loan and eligibility is less restrictive than most traditional lending institution loans. You do not have to have equity in your home to get an FHA Title I home improvement loan.
For most home improvement projects the largest expense often comes from the amount of manual labor involved, so by doing some of that work yourself, you can really shrink the total cost of the overall job. There are lots of affordable DIY home improvement projects most people can do around their houses with just a little bit of knowledge and a willingness to work. This is a great way to keep the costs of a home remodeling project down.
If you have a important house repair that needs to be done, don’t let your home’s dropping value prevent you from getting the money you need to make the improvements. Most manageable home repairs can become large headaches if they are allowed to go unaddressed for too long. And, as expected, large home improvements always end up costing more than the little ones.
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