Secured Home Improvement Loans – A Complete Guide

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Sprucing up your home is often a better option than buying a new house. It increases the value of a property, which comes in handy if you are planning to sell the home anytime soon. If you are also a homeowner who wants to opt for home renovation, you should know about secured home improvement loans. It will make the home renovation experience memorable and enjoyable.

When it comes to home improvement loans, many people seek collateral loans while some don’t have collateral. Here you can find information on which lenders to approach and what is the process when applying for secured home improvement loans.

Financing Home Renovations: Why Choose a Secured Home Improvement Loan?

If you want to get financial assistance when going for home renovation, secured home improvement loans are a good option. These loans provide many benefits. We have listed a few of them here.

  • Lower Interest Rate

When you opt for collateral loans, it is likely that you will have a lower interest rate. The interest is usually fixed too. It means that the interest rate would remain the same even after a few years. The reason why the interest rate is low and fixed is that the risk is lower with collateral loans. A lender has the power to sell off the collateral in case the loan is not paid off in time. This reduces the risk of the lender. Getting a loan with low-interest rate that is to be repaid over an extended period is smart.

In contrast, if you opt for an unsecured loan rather than collateral loan because you don’t have an asset to offer, the interest rate would usually be high and variable. This is because the risk taken by a lender would be quite high. The lender won’t have the power to get back the money by selling any of the assets because you wouldn’t have provided the lender with an asset.

  • Lower Payment

As mentioned before, the payment of home renovation loan is easy on the budget if you offer collateral. It allows you not to strain your finances too much just because you have taken a loan. You get to maintain your standard of living while ensuring that your home looks better. You just need to pay a small amount of your salary or income to get rid of the loan.

  • House Renovation Loan Flexibility

If you opt for a home renovation loan, you will get the flexibility to use the loan amount however you wish. For instance, some people add a new room to get the most value from a home renovation project. In contrast, some people just go for basic repairs because they want to keep the loan amount minimal. No matter which option you go for, the lender won’t interfere or have any say about what you do with the money.

  • Better Choice of Lenders

The choice of lenders is wider when you seek secured home improvement loans. It is a fact that more honest and a higher number of lenders provide secured loans. In contrast, if you seek unsecured home improvement loans, you will get only a few options. The probability of coming across a fake lender or a conman is also higher if the loan is unsecured.

When you are looking for the top providers of homeowner loans, you should consider a website like loansgeeks.com to compare home improvement loans. It will ensure that you get a list of lenders who can help you within a few seconds. The website will provide the list of suitable lenders of homeowner loans as soon as you provide some basic data.

You can’t skip providing the data because the website finds the best options of lenders or homeowner loans on the basis of your paying capacity and current financial situation. Once you get a list of lenders, feel free to compare home improvement loans before making a decision.

Choosing a Secured Home Improvement Loan Provider

In case you are looking for a list of trusted lenders who can help you with financing home renovations, you should consider the 5 options we have picked for you.

You can also compare home improvement loans terms and conditions before making a decision. Rest assured that all these lenders have a very good reputation, are trustworthy and genuinely want to help people. The websites of these lenders are enough to let you know that you will get a loan quickly and safely when you trust these names.

Interest Rate
Monthly Payment
Prepayments
Rate Hold
5.75%
$629.11
Contact brokerage for information
-
3.54%
$502.77
Contact brokerage for information
30 Days
3.19%
$484.15
20% / 20%
30 Days
3.18%
$483.63
20% / 20%
120 Days
3.99%
$527.28
Contact brokerage for information
-

*For monthly payments calculation purposes, the following parameters were used: $100,000 mortgage size, 2 year fixed rate and 25 years term.

Sigma Mortgage

Visiting this website is a good choice when you are seeking a house renovation loan. Here, the mortgage experts would listen to you and help you in the best possible manner. An expert will be assigned to you who will get in touch with different mortgage companies and banks to help you get a loan you need. This allows you to compare mortgage rates and features for any type of loans, even a house renovation loan before deciding.

Users also get unbiased, independent and reliable advice that will ensure you choose the best option. The experts offering advice have a deep understanding of the mortgage industry. They also keep an eye on all the products and features that are being launched continually. This website is trusted by scores of real estate investors and common people hoping to add a new charm to their existing home.

True North Mortgage

This is another website you can trust when you are looking for a house renovation loan. The true worth of this website can be analyzed by the fact that it has most five star reviews by customers in the industry. A company that is highly appreciated by other customers who were also seeking loans because they wanted better home improvement financing can be easily trusted.

The company also employs highly trained mortgage experts who deliver unified and consistent service to everyone. It helps make the loan process easy by dealing with banks on your behalf.

Dominion Lending

When seeking reliable home improvement financing, this is another website you can consider. It helps even those who have credit blemishes. The website aims to simplify your life by taking the stress out of lending. It also has more than 2,600 experts offering free advice to people seeing a loan.

The company has won many awards that attest to its excellence. It also has excellent people who come to the clients’ aid whenever needed. They also work on the weekends or evenings. The website allows users to find an expert in their area, as it offers access to mortgage calculators as well. It enables you to consider different mortgage options before finalizing one for your home improvement financing needs.

Alpine Credits

If you want to explore the best home improvement loans options, this website is a good one. It has been helping people since 1969 and serves people of Alberta, Ontario and British Columbia. The home equity loans here are worth considering. They allow you to get a loan even if you have a bad credit history or if your income is not sufficient enough. The loans are approved at a fast pace which proves that the website is efficient.

The lender doesn’t care whether you are using the best home improvement loans for only home improvement or whether you are funding a dream vacation with it. The lender only wants you to help get the money you need. The website prides itself on having a knowledgeable and helpful team that is ready to answer all the questions. The rates offered for best home improvement loans by this website are legit too.

Capital Direct

Capital Direct offers all homeowners possibility to upgrade their houses and consolidate and simplify their debts. Aside from this, homeowners are able to use loans to grow their business.

The brokerage is offering rapid approvals that are based on the equity value of the house. It also offers the chance to get the funds in just a matter of days.

Preparing for a Secured Home Improvement Loan

Now that you have some knowledge of home improvement loan options, you should learn how to prepare for a secured home improvement loan. It will help you to avoid wasting or overspending money. It will also ensure that you get the most out of the money you spend.

There are three main steps you need to follow to prepare yourself. First, you need to work on improving your credit score, then you need to evaluate the value of your house and ensure that you plan all home improvements in advance. Here we are explaining all of them in detail to help you out.

How to Improve Your Credit Score?

The first thing you can do to prepare for a home improvement loan is to ensure that you have a good credit score. If you have a good credit score, you will have more home improvement loan options because more lenders would be willing to help you. Though you can get loans with bad credit too, choosing to have good credit is the smarter route.

Apart from allowing you to get more home improvement loan options, having a good credit score can also reduce interest rates. Most lenders will provide you with a low and suitable interest rate if you have a good credit score. In contrast, if your credit score isn’t good, the lenders would demand a high-interest rate.

Their perspective is not wrong because when they offer a loan to a person with bad credit history, they are taking a risk. So, they compensate for the risk by levying a high-interest rate. People who have a good credit score also have more negotiating power when it comes to other aspects of a loan. For instance, people with a good credit score can choose to repay the loan in more than one installment. The lender would agree to such terms because he or she will know that the person with a good credit score is reliable and won’t just disappear.

Evaluating the Value of Your House

It is a fact that even if you are a homeowner, you are not allowed to borrow 100 percent of the equity. So, you would be smart to seek only the best home equity loans in which a lender would give you a percentage of the equity in cash. To understand this better, let’s have a look at this example:

Let’s suppose the total value of your home is $185, 000 and you still have $100,000 outstanding on the mortgage. In such a case, you will have just $85,000 in equity. You must know that equity is the difference between the total worth of your property in the current market minus the outstanding on the mortgage.

Continuing with the above example, the lender will offer only a certain percent of the equity in cash. Even if you have chosen a lender who offers best home equity loans, the lender would most likely offer 50 percent of the equity in cash. It means that you can expect about $42,500 from the lender who offers best home equity loans.

If you are planning to take a loan against your home, make sure you know about these risks too.

Plan Your Home Improvements

When you decide to go for one of the best secured home improvement loans, you obviously know that the loans need to be repaid too. So, you would be smart to use the loan amount wisely. It is better to do the planning before actually getting the cash. Why? It’s because this will help you to borrow only an amount that you actually need and you won’t borrow more money than you need.

We recommend that if you are taking the secured home improvement loans for the first time and want to play it safe, you should do only the essentials first. For instance, getting a leaky water pipe fixed is more important than adding a fresh coat of paint on a wall. Only when you are done with the essentials, you should opt for more cosmetic improvements.

It is also recommended that you talk to an expert like a construction expert, a handyman or a plumber about the possible costs. It will ensure that you don’t opt for a loan amount that’s lower than the amount needed to maintain the quality of repairs. Many such experts offer a free consultation and might type a report on the money you need. Such documents can come in handy when you are talking to the lender and pitching for a higher loan amount than what’s being offered.

Secured Home Improvement Loan Terms You Should Know

Secured homeowner loans are becoming quite popular as people are seeking it with regularity. Here we have explained not only what secured homeowner loans, but we have also explained some terms associated with the loan. Knowledge of these terms will help you to be a smart loan seeker who knows what a lender is talking about.

In simple terms, secured homeowner loans are loans in which a person offers some form of collateral or an asset to secure a loan for tasks like home renovations. In most cases, the collateral is the home of the homeowner. Sometimes, it can be another asset like a vehicle or an expensive piece of art.

  • What is Interest Rate?

An interest rate is the percentage of interest charged by the lender to give you a loan. The home renovation loan rates vary on the basis of your credit score. If your credit score is high, you will get low home renovation loan rates. In contrast, if your credit history is bad, you will get high home renovation loan rates. The interest rate of secured loans is usually lower than unsecured loans as the lenders get collateral in the former.

  • Terms of Collateral

When seeking remodeling loans, make sure that you read all the terms of collateral. These terms usually dictate how soon a lender can sell off your assets in case you fail to pay the loan. The higher the number of days between no repayment and the time the lender can sell off an asset, the better it is. Ideally, you would need to make sure that the lender allows at least 90 days of no payment. In case you are sure that you will pay the loan back in just 15 days, you can opt for the standards 30 days’ time period too.

  • The Value of Collateral

The value of the collateral is determined by an expert when you are seeking remodeling loans. For instance, a licensed real estate appraiser will come to judge the value of your home if you are using the home as collateral. The expert would then submit a report to the lender providing remodeling loans. It will help the lender to determine the loan amount that can be offered to you. Always hope for a high collateral value if the loan amount you are seeking is high.

  • Penalties and Fees

When you want home remodel loans, make sure that you read all the agreements and other documents carefully. These documents will contain important information like fees and penalty you might have to pay if you pay the loan before time or if you fail to repay the loan in time. If you fail to pay attention to these things, you might end up having to pay a hefty fee just because you are paying the loan earlier than the set date.

  • Loan Terms

The length of loans and the monthly payment you need to pay towards it also matter when you plan to take out home remodel loans. So, you need to ensure that you have the capability of paying the set monthly amount month after month for years. You should also have a say in the total duration of payment. If your income is low, you can opt for a longer duration and higher interest with lower monthly payment. In contrast, if your income is high, you can increase the amount of monthly payment for home remodel loans and reduce the interest rate and the duration of the loan.

Final Words

In essence, it can be said that the process of finding renovation loan options is becoming easier these days. You just have to brush up your knowledge on loan terms, find a lender who has excellent renovation loan options and get a loan amount that you can repay easily.

Also, avoid falling for home improvement scams and hire the real experts for the task. The entire process won’t take more than a few hours if you are dedicated and do thorough internet research. Try it and you’ll agree that finding renovation loan options is as easy as 1-2-3.

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