How to Get Home Improvement Loans without Tying Up Your Equity
Do you need money for improvements to your house? Maybe the roof is old, and it needs to be replaced. Perhaps you are tired of looking at that outdated kitchen or bathroom. You can get a standard remodeling loan, but it will tie up the equity you have in your home. There is an alternative solution, and it involves personal home improvement loans. What is this kind of financing? Here is more information on the subject.
Standard Ways to Get the Money You Need
When you need money to repair or renovate your house, you can choose a home equity loan or refinance. Here is how these home improvement loans work.
Home Equity Lending
With a home equity loan, you go a lender to borrow money. The lender asks you to put up the equity in your home as collateral. If you default on the loan, the lender has an interest in your house. In other words, they can own part of your property.
With a loan refinance, you apply for a new mortgage on the property. This lets you take out the equity that you have. However, there are a few problems with both strategies. For example:
- You must pay loan fees
- You’ll owe substantial closing costs with refinancing
- You may not have enough equity in your home
Personal Loans – The Alternative Solution
With personal home improvement loans, you don’t have to use the equity in your property as collateral. In fact, there is no collateral required. Your loan resource provider can find you some of the best deals available. The application process is fast and easy, and you can find loans with interest as low as five percent in some cases, and for as much as $500,000, depending on your creditworthiness.