It’s time to make improvements to your home. Do you need an extra bathroom or to remodel your kitchen? Low interest home improvement loans could cover your expenses. What does it take to secure a loan at a low interest rate? What does your financial situation need to look like? Will your credit score meet your lender’s requirements? Do you need a down payment? Let’s take a look.
4 Tips to Secure Low Interest Home Improvement Loans
- A good credit score — Your credit score is the first thing your lender will look at to decide what loan you qualify for. Three standard home improvement loans are available: FHA 203(k), Fannie Mae’s HomeStyle, and FHA Title I. Any of these loans will require a good credit score to secure a low interest rate. What’s a good score? We’re talking over 700, maybe even into the upper 700’s. Not sure what your credit score is? Check with these three credit report agencies to find out.
- A down payment — A down payment is rare for a FHA Title I loan. FHA Title I loans are for smaller projects, like making your home wheelchair accessible. A FHA 203(k) will require at least a 3.5% down payment. A HomeStyle loan will ask for a minimum of 5% down. With the FHA 203(k) and HomeStyle loans, the equity in your home will determine the down payment amount.
- Have no bankruptcies or defaults — Have you had any bankruptcies or loan defaults? You will not qualify for low interest home improvement loans if you’ve have had any defaults or bankruptcies in the past five years. Your payment history of all debts, government loans and taxes need to be current as well.
- Visit with your lender ASAP — Talk to your lender early. Your lender will review your credit score and offer a down payment estimate. They will explain low interest home improvement loans and which one is right for you. They will help you get the interest rate you desire.
These quick tips will help you to evaluate your financial situation and give you a leg up on obtaining low interest home improvement loans. Check your credit score and make any necessary changes. Don’t wait to start saving money for your down payment. Find out your payment history and make your payments on time. Meet with your lender and see which low interest home improvement loans are best for you.
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