Bad credit home improvement loans are loans taken out to make improvements, changes or additions to your home. Perhaps your home is in dire need of a new paint job, a new roof or a garage addition, this is when a home improvement loan can come to the rescue.
With bad credit home improvement loans, credit is not really a huge issue, being that these types of loan are primarily based on the value of your home and equity in your home.
If you have built-up a good amount of equity in you home, you can check into a home equity loan / home equity line of credit to do the home improvements you need.
Not only can home improvement improve the value of home, but it can also land you some huge tax credits.
Things to ask yourself when considering a home improvement loan
- Is it a need or a want?
- Will the improvements significantly increase the value of your home?
- Can you afford the improvements at this time?
- What home improvement tax deductions or credits will I gain as a result?
Get Multiple Quotes
There’s a variety of bad credit home improvement loans with different interest rates. Therefore, we strongly advise you to get multiple quotes from several different contractors and lenders. You should get quotes from contractors before approaching lenders so that you’ll know how much you need to borrow.
For example: If you need a roof repair, then you should get at least 3 to 5 quotes from home improvement contractors in your area. This way, when you approach lenders they can easily determine how much financing each job will require.
Doing this also puts you in a positive light as a more responsible borrower, being that you’ve done your homework.. Shopping the market will enable you to secure the best most cost-effective loan possible for your home improvement.
You should also check with your local bank/credit union that you have had an ongoing relationship with over the years. They may be willing to work with you despite bad credit and other circumstances.
Also nowadays you can get several convenient to find out exactly what you need and what you qualify for.
Types of Home Improvement Loans
First Mortgage – A loan taken out and added-on to your original mortgage for purposes of home improvement.
Second Mortgages – i.e. home equity loans, home equity line of credit (HELOC)
Refinancing – The refinancing of your original loan to create
a more appealing loan with lower interest & fees.
Personal Loans – Financing for any personal use like home improvement or other. Your home value and equity is not an issue and is not involved, and the loan is typically unsecured.
In addition, there are home improvement grants provided under HUD’s Section 203(k) program to help lower income neighborhoods.