Home Improvement Loans

The benefits of a Home improvement loan is that if done correctly, it can add value to your property. This is something most lenders are also happy about because it reduces the loan to value of your mortgage, because of the increase in price. With the current market in turmoil, it is becoming an increasingly popular alternative to moving house.

The main types of Home improvement are double glazing, conservatories and Kitchen and Bathrooms. Other types are extensions, which are usually a good way of increasing value because you are increasing the size and usually adding rooms such as bedrooms. What you must take into consideration is that the cost of the Home improvement will increase the value of your property by as much if not more. In most areas, all properties have a ceiling value, this tends to be a value at which that type of property will sell at, if you add or improve your property, will you be able to recoup the cost? If you intend to live in the property for many years then the increase in value may not be your primary concern.

With the housing market apparently slowing, and in some areas prices dropping, it seems that Home Improvements will become, as it has been for some time, a popular choice for homeowners. One key factor in your choice of home improvement should be the quality of the workmanship. A poorly crafted conservatory, can reduce value instead of increase, therefore the onus is to ensure that whatever home improvement is carried out, is done to a good standard and compliments the existing structure.

Loans for Home improvements can be sourced from an good packager of loans, who will guide you through the process and keep you fully informed until the loan completes.

By Alan Reed
Published: 12/5/2007

Seven tips for Getting a VA Loan

Veteran's Administration (VA) loans are a type of housing loan given to military veterans by private financing and lending institutions. The amount of financing that can get approved is potentially larger than that offered by conventional housing loans. The coverage of a VA loan is also a bit wider in scope, allowing veterans not only to purchase a house, but to use the money for refinancing and altering an existing home. VA loans are being offered by a lot of different groups that have tie ins with the Veteran's Administration, so when checking out the various loan options, you should look at the seven following tips to ensure that you find one that's right for you.

1) Check your eligibility for the loan - before applying for a VA loan, you must first apply for a certificate of eligibility. The request is made by the VA Form 26-1180. Once approved, the Winston-Salem eligibility center issues the certificates. These certificates are not guarantees of loan approval, however, they are merely the first step to getting a loan.

2) Check your credit rating - a person's credit rating is extremely important for getting any type of loan approved. Be sure to check your credit ratings before making any loan applications with a lending institution. Be aware that some financing groups have stricter policies regarding shaky credit histories than others, while some tend to be more lenient with lower amounts. Take everything in your credit history into account, as some groups have different qualifications for what constitutes a good credit history.

3) Occupancy is Important - VA loans are intended for assisting veterans and their families afford housing. Trivial things like second homes and summer vacation homes have reduced chances of getting approved. When applying for a loan, it is important to stress that you and/or your spouse and dependents will be occupying the house as a permanent residence in a short period of time after the loan is approved and the house is purchased.

4) Consider Income when applying for the Loan - you have to show financial capacity when applying for the loan. This does not mean simply that you can afford to pay the loan back within a reasonable amount of time. Aside from paying back the loan, other things to consider when applying for the loan is whether you can handle the mortgage and the day to day expenses for the house's upkeep. Another consideration regarding income is that it is not necessarily a solo venture. Your spouse's income and livelihood can also be used as additional factors to help you get a good loan.

5) Consider your Status of service - loan applications differ depending on your military service. For example, VA loans are primarily geared towards active members, but discharged veterans may also apply depending on factors like the terms of discharge and the tenure of active service. Furthermore, while the offer is made for any military veteran, reservists have to go through slightly different procedures than veterans from active units. Likewise, there are also modified considerations for some loans for those who have served primarily in a peace time capacity as opposed to those who have seen combat. When applying for the loan, make sure that it covers your personal qualifications.

6) Study the lenders carefully - there are a lot of diferent private lending institutions that work with the Veteran's Association to provide VA loans. While all are certified by the VA and are guaranteed, each one will have different credit limits on their loans, different terms of interest and different repayment methods. Be sure to look for one that you can afford to repay in a reasonable amout of time with minimum fuss.

7) Don't start house hunting till after you know the size of the loan - most applicants try to find a house first, then apply for a loan to suit it's size. This does not mean that they will get their loans, and as a matter of fact limits their options severely. The best thing to do is to wait until your loan is approved. At that point, VA consultants will visit the house you're trying to get to make sure it fits within your budget. If you get the loan first then you'll at least be guaranteed of finding a house that will fit your funding, thus gaining the VA consultant's final approval.

by Groshan Fabiola

Getting a Home Equity Line of Credit

Credit cards are a good thing, but a home equity credit line is a great way to use the equity in your home to finance big ticket items such as home improvements, paying off high-interest debt, financing a car, or paying for college tuition.

A credit card is a revolving line of credit that you use when you need it, and make payments only if you use it. But credit cards can charge very high interest rates. A home equity line of credit (HELOC) is also a revolving line of credit. You draw from it again and again as you need it, and make payments only if you use it. But, unlike most credit cards, you get a much lower interest rate with a home equity line of credit than with a credit card.

Using a home equity line of credit is a way to turn bad debt into good debt. In other words, the interest on the debt you have on your high-interest credit card cannot be deducted from your taxes. But the interest on your HELOC is usually tax-deductible*.

There is also flexibility that can be built into home equity loans that you wouldn’t get for say, an auto loan. There are different home equity programs that have an interest-only option. With an interest-only loan, you can pay only the interest for a pre-determined amount of time and pay as much principal as you want, even none. You can’t do that with an auto loan. Most lenders offer home equity lines of credit for up to $100,000. But Quicken Loans offers a line of credit for up to $500,000! This is a great option to have when buying your dream vacation home.

It’s fairly easy to get a home equity line of credit. That’s one of the best things about it! Nowadays, many companies allow you to apply online and close within a very short period of time, 7-10 days typically. There’s less paperwork to deal with, the closing costs are less expensive and the process is just as easy as applying for a credit card. If you get a home equity line of credit at the same time as your first mortgage with the same lender, you only have one closing to go to for both loans.

I want to rent my home. Should I refinance to an option ARM just in case it doesn't rent?

Q. I wish to rent my home and keep it as an investment property. I currently have a 30-year fixed-rate mortgage of 5.5% on this property. It's appraised at $240,000. and I owe $104,000 on the loan. Should I refinance with an option arm just in case it doesn't rent?

A. The way we see it, you have a great rate on your first home and a relatively small balance left. If you refinanced to almost any other type of mortgage you'd have to pay a higher rate -- or would have to pay a higher rate very soon after the low promotional rate used to lure you into the loan reset. Option ARMs are the worst when it comes to raising rates. While traditional adjustable rate mortgages wait at least one year before resetting, some option ARMs begin raising rates after the first month.

The other problem with option ARMs is that you'll be tempted to make the "minimum payment" each month. That payment is lower than with any other type of loan because it isn't even enough to cover the monthly interest charge on the loan. The difference is added your balance and so your debt actually grows each month. You've got a lot of great equity in this house and reducing that is no way to build wealth.

So why not stick with the great mortgage you have now and see if you can make it work before trying to refinance into a loan that could wind up costing you more or adding to your debt?

By: http://home-equity.interest.com

Should I install a solar energy system using a home equity loan, even when rates are at 8.25%?

Q. What is your take on upgrading your house to include solar energy and taking the money out of the equity of your home even when rates are at 8.25%. They may not rise before summer, but do you see them rising after that?

A. It's often hard to determine whether solar heating or electrical systems will save much if any money in the long run. You not only have to consider the cost of buying, installing, maintaining and financing the equipment, but the price of natural gas and electricity over the next decade as well. That is very difficult to forecast. But most homeowners who install solar systems seem to be happy with their decision. Even if they don't save a lot of money, they have the satisfaction of knowing they did something good for the environment. How do you put a dollar figure on that?

But if you're going to do it, you should do it now because you should qualify for some generous tax credits that are only available this year. Whether you're installing photovoltaic panels that turn sunlight into electricity or a water heating system, you'll receive a tax credit for 30% the cost of the system, up to a maximum of $2,000. Each project must meet specific criteria and the work must be completed by 2007. Your contractor should know the details. (You can also get tax credits for other improvements, such as new windows, air conditioning units and water heaters.)

As far as where the prime rate will go this year, the best guess is that it should stay at 8.25% at least until August. What the Federal Reserve decides to do after that will depend on the economic data we see over the next six months. If you decide to go with a home equity loan to finance your project, be sure and shop around. Some banks, particularly smaller ones, are offering rates that are 0.5% or even 1.0% below prime. You can find the best deals on our comparison charts of home equity rates.

Another option would be a cash-out refinancing. This is where you refinance your primary mortgage for more than your current balance and use the extra cash to pay for your solar project. With home equity rates so high, that has become a very popular way to get money for home improvements and to pay off credit card debt, because average mortgage rates are still below 6.5%. If you're paying more than 7% on your current mortgage, or you have an adjustable rate loan that's poised to go that high, this could be a less expensive way to go.

By: http://home-equity.interest.com