{"id":4075,"date":"2019-11-06T12:53:58","date_gmt":"2019-11-06T12:53:58","guid":{"rendered":"https:\/\/dreamhomefinancing.com\/?p=4075"},"modified":"2023-02-11T16:07:47","modified_gmt":"2023-02-11T21:07:47","slug":"home-improvement-loan","status":"publish","type":"post","link":"https:\/\/dreamhomefinancing.com\/home-improvement-loan\/","title":{"rendered":"Refinance for Home Improvements &#8211; Home Improvement Loan"},"content":{"rendered":"<h2><strong><span style=\"color: #000000;\">Refinance for Home Improvements &#8211; Home Improvement Loan<\/span><\/strong><\/h2>\n<p><span style=\"color: #000000;\"> <img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-4083\" src=\"https:\/\/dreamhomefinancing.com\/wp-content\/uploads\/2019\/11\/Home-Improvement-loan.jpg\" alt=\"Home Improvement loan\" width=\"660\" height=\"400\" data-pin-description=\"Home Improvement loan #homeimprovement #realestate #remodel #homerepair #cashoutrefinance\" srcset=\"https:\/\/dreamhomefinancing.com\/wp-content\/uploads\/2019\/11\/Home-Improvement-loan.jpg 660w, https:\/\/dreamhomefinancing.com\/wp-content\/uploads\/2019\/11\/Home-Improvement-loan-300x182.jpg 300w\" sizes=\"(max-width: 660px) 100vw, 660px\" \/><\/span><\/p>\n<p><span style=\"color: #000000;\">If you are looking to refinance for home improvements, then you will likely be searching for a home improvement loan or sometimes called a home renovation loan or a cash out refinance loan. Lenders offer various mortgage programs to get this accomplished, but their guidelines and criteria will differ.<\/span><\/p>\n<p><span style=\"color: #000000;\">The most common home improvements made after getting a home improvement loan are new kitchens and baths, windows and siding, and even a new pool. In some instances, homeowners will add on a new room such as a master suite. These improvements and modifications often are costly and require special types of financing.<\/span><\/p>\n<h2><span style=\"color: #000000;\"><strong>Types of home improvement loans<img loading=\"lazy\" decoding=\"async\" class=\"alignright size-medium wp-image-4084\" src=\"https:\/\/dreamhomefinancing.com\/wp-content\/uploads\/2019\/11\/home-improvement-loans-147x300.jpg\" alt=\"Home Improvement loan\" width=\"147\" height=\"300\" srcset=\"https:\/\/dreamhomefinancing.com\/wp-content\/uploads\/2019\/11\/home-improvement-loans-147x300.jpg 147w, https:\/\/dreamhomefinancing.com\/wp-content\/uploads\/2019\/11\/home-improvement-loans-502x1024.jpg 502w, https:\/\/dreamhomefinancing.com\/wp-content\/uploads\/2019\/11\/home-improvement-loans.jpg 735w\" sizes=\"(max-width: 147px) 100vw, 147px\" \/><\/strong><\/span><\/h2>\n<p><span style=\"color: #000000;\">These are the most popular loan programs for homeowners to utilize when refinancing for home improvements. Each one of these home improvement loan programs are very different from one another and will likely have different requirements and interest rates.<\/span><\/p>\n<h3><span style=\"color: #000000;\"><strong>Cash Out Refinance for Home Improvements<\/strong><\/span><\/h3>\n<p><span style=\"color: #000000;\">A cash out refinance is when you refinance your current mortgage balance for a higher amount and use the additional cash for other purposes. There are a multitude of reasons for a cash out refinance other than to make home improvements. The most common reason is actually for debt consolidation.<\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #808000;\"><strong>Benefits of a cash out refinance<\/strong><\/span><\/p>\n<ul>\n<li><span style=\"color: #000000;\">Finance your primary mortgage and borrow the funds needed for home improvements all on one loan<\/span><\/li>\n<li><span style=\"color: #000000;\">Many lenders offer cash out refinance options<\/span><\/li>\n<li><span style=\"color: #000000;\">Interest rates are reasonable<\/span><\/li>\n<li><span style=\"color: #000000;\">You can use the funds for any purpose<\/span><\/li>\n<\/ul>\n<p style=\"padding-left: 40px;\"><span style=\"color: #808000;\"><strong>Disadvantages of a cash out refinance<\/strong><\/span><\/p>\n<ul>\n<li><span style=\"color: #000000;\">Lenders will cap the loan to value ratio which could limit the amount you can borrow<\/span><\/li>\n<li><span style=\"color: #000000;\">You are re-starting your mortgage again with a fresh 30 years<\/span><\/li>\n<li><span style=\"color: #000000;\">Cash out amount limited by your credit score<\/span><\/li>\n<li>You may end up with a higher rate than what you have now<\/li>\n<\/ul>\n<p style=\"padding-left: 40px;\"><span style=\"color: #000000;\">Cash out refinances are the most popular and widely available option for people who are looking to refinance for home improvements. Read this article about <a href=\"https:\/\/dreamhomefinancing.com\/cash-out-refinance.aspx\"><span style=\"color: #0000ff;\"><strong>cash out refinances<\/strong><\/span><\/a> for more information.<\/span><\/p>\n<h3><span style=\"color: #000000;\"><strong>Home Equity Line of Credit for Home Improvements<\/strong><\/span><\/h3>\n<p><span style=\"color: #000000;\">A home equity line of credit or home equity loan is also often used for home improvements. With this type of loan, you keep your original mortgage in-tact. The home equity line of credit provides you with an approval for a credit line that you can draw against at your discretion. You only pay interest on the funds you have drawn and not on the total approved loan amount.<\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #808000;\"><strong>Advantages of a home equity line of credit for home improvements<\/strong><\/span><\/p>\n<ul>\n<li><span style=\"color: #000000;\">You only pay interest on the amount that you draw<\/span><\/li>\n<li><span style=\"color: #000000;\">Your original mortgage can remain in place especially if you have a low rate<\/span><\/li>\n<li><span style=\"color: #000000;\">It can remain open for as long as you own your home<\/span><\/li>\n<li><span style=\"color: #000000;\">Funds can be used for any purpose<\/span><\/li>\n<\/ul>\n<p style=\"padding-left: 40px;\"><span style=\"color: #808000;\"><strong>Disadvantages of a home equity line of credit for home improvements<\/strong><\/span><\/p>\n<ul>\n<li><span style=\"color: #000000;\">The interest rate is adjustable and could increase significantly over time<\/span><\/li>\n<li><span style=\"color: #000000;\">Making just minimum payments could increase your loan balance<\/span><\/li>\n<li><span style=\"color: #000000;\">Your home can be foreclosed upon if you miss payments on a HELOC<\/span><\/li>\n<\/ul>\n<p><span style=\"color: #000000;\">If you are self-employed and cannot qualify using your tax returns, then this option is not available to you<\/span><\/p>\n<p><span style=\"color: #000000;\">If your first mortgage has a low rate, then a home equity line of credit may be the best option for you. Contact us to discuss your options and scenario.<\/span><\/p>\n<h3><span style=\"color: #000000;\"><strong>FHA 203k Loan For Home Improvements<\/strong><\/span><\/h3>\n<p><span style=\"color: #000000;\">An FHA 203k loan is one that traditionally is used at the time of purchase when you are <a href=\"https:\/\/www.maxrealestateexposure.com\/buying-fixer-upper\/\" target=\"_blank\" rel=\"noopener noreferrer\">buying a fixer upper<\/a>. You are able to borrow the money needed (with 3.5% down) to purchase the home AND also borrow the funds for remodeling and repairs all in one loan. This is the only option that allows you to purchase more than the value of the home for home improvements.<\/span><\/p>\n<p><span style=\"color: #000000;\">Although <a href=\"https:\/\/dreamhomefinancing.com\/FHA203kRehabLoans.aspx\"><strong><span style=\"color: #0000ff;\">FHA 203k loans<\/span><\/strong><\/a> are traditionally used at the time when the home is being purchased, they can also be used when refinancing even after you already own the home.<\/span><\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #808000;\"><strong>Advantages of an FHA 203k loan for home improvements<\/strong><\/span><\/p>\n<ul>\n<li><span style=\"color: #000000;\">One loan to finance the home plus all of the improvements<\/span><\/li>\n<li><span style=\"color: #000000;\">You can borrow more than the value of the home on a purchase<\/span><\/li>\n<li><span style=\"color: #000000;\">Loan to value ratio up to 110% of the improved value<\/span><\/li>\n<li><span style=\"color: #000000;\">Interest rates are low<\/span><\/li>\n<\/ul>\n<p style=\"padding-left: 40px;\"><span style=\"color: #808000;\"><strong>Disadvantages of an FHA 203k loan for home improvements<\/strong><\/span><\/p>\n<ul>\n<li><span style=\"color: #000000;\">Funds can only be used for home improvements<\/span><\/li>\n<li><span style=\"color: #000000;\">Some improvements such as pools are not permitted<\/span><\/li>\n<li><span style=\"color: #000000;\">All plans must be pre-approved before the loan closes<\/span><\/li>\n<li><span style=\"color: #000000;\">An FHA consultant must be used to oversee the project<\/span><\/li>\n<li><span style=\"color: #000000;\">Not all lenders offer this program<\/span><\/li>\n<\/ul>\n<p><span style=\"color: #000000;\">The FHA 203k rehab refinance loan is really a great option for home improvements if you are able to get it all done<\/span><\/p>\n<h3><span style=\"color: #000000;\"><strong>Home Improvement Loan Rates<\/strong><\/span><\/h3>\n<p><span style=\"color: #000000;\">The rates to refinance your home for home improvements will vary depending upon the loan program and the lender. Two of the most significant factors impacting your rate are the loan to value ratio and your credit score. It cannot be emphasized enough how important it is to have good credit. If you are struggling with your credit, then read this article on <a href=\"https:\/\/dreamhomefinancing.com\/ImproveCreditScore.aspx\"><strong><span style=\"color: #0000ff;\">how to improve your credit score<\/span><\/strong><\/a>.<\/span><\/p>\n<p><span style=\"color: #000000;\">Setting up a home improvement project can take some time so ask your lender whether you can lock in your interest rate well in advance and whether there are any fees for an extended rate lock.<\/span><\/p>\n<h3><strong>Home Improvement Loan Q&amp;A<\/strong><\/h3>\n<p><span style=\"color: #000000;\"><strong>How much cash can I take out for home improvements?<\/strong><\/span><br \/>\n<span style=\"color: #000000;\">The amount of cash you can take out for home improvements is directly tied to how much equity you have in your home. There will be a maximum loan amount for each type of mortgage. The loan product that will allow you to cash out the most is the FHA 203k refinance loan.<\/span><\/p>\n<p><span style=\"color: #000000;\"><strong>Does the lender have to approve the home improvements?<\/strong><\/span><br \/>\n<span style=\"color: #000000;\">Lenders will not have to approve the repairs or remodeling plan before closing your loan. In most instances, you can do whatever you want with the funds. However, the FHA 203k refinance is different and everything must be approved, even your contractor.<\/span><\/p>\n<p><span style=\"color: #000000;\"><strong>Should I cash out money from my 401k for home improvements?<\/strong><\/span><br \/>\n<span style=\"color: #000000;\">There are some 401k programs which allow you to pull out the funds to make home improvements. However, you should read the rules of your 401k plan closely and then consult with a financial advisor and a tax accountant. It is possible that you could pay a hefty tax penalty which is why you must seek professional advice before going this route.<\/span><\/p>\n<p><span style=\"color: #000000;\"><strong>Can I get a home improvement loan for a condo?<\/strong><\/span><br \/>\n<span style=\"color: #000000;\">Home improvement loans can absolutely be used for the remodeling of a condo. There are some rules and limitations when it comes to changes you can make in a condo. Some condo associations have rules regarding changes to the units and you may need to get approvals from the condo association.<\/span><\/p>\n<p><span style=\"color: #000000;\"><strong>Can I get a home improvement loan for a mobile home?<\/strong><\/span><br \/>\n<span style=\"color: #000000;\">Finding a lender that will provide home improvement financing for a mobile home may be difficult. Not many lenders want to provide any type of mortgage for mobile homes. However, the few that do may require the home to be on a permanent foundation and for it to be at least double wide.<\/span><\/p>\n<h3><span style=\"color: #000000;\"><strong>Related Articles<\/strong><\/span><\/h3>\n<p><a href=\"https:\/\/dreamhomefinancing.com\/Can-I-Get-a-Bank-Statement-Cash-Out-Refinance-Loan\/\"><strong><span style=\"color: #0000ff;\">Bank statement cash out refinance options<\/span><\/strong><\/a><\/p>\n<p><a href=\"https:\/\/dreamhomefinancing.com\/HomeEquityproducts.aspx\"><strong><span style=\"color: #0000ff;\">Home equity line of credit products<\/span><\/strong><\/a><\/p>\n<p><a href=\"https:\/\/fhalenders.com\/fha-203k-loan\/\" target=\"_blank\" rel=\"noopener\"><strong><span style=\"color: #0000ff;\">FHA 203k Home Improvement and Rehab Guidelines<\/span><\/strong><\/a><\/p>\n<p><span style=\"color: #008080;\"><a style=\"color: #008080;\" href=\"https:\/\/patents.google.com\/patent\/US7254556B2\/en\" target=\"_blank\" rel=\"noopener noreferrer\">System for using a home equity line of credit to pay down debt<\/a><\/span><\/p>\n<p><span style=\"font-size: 18pt; color: #808000;\"><strong>Discussion Topics<\/strong><\/span><\/p>\n<p><span style=\"color: #ff9900;\"><strong><a style=\"color: #ff9900;\" href=\"https:\/\/dreamhomefinancing.com\/category\/Mortgage-Advice\/\">Mortgage Advice<\/a><\/strong><\/span><\/p>\n<p><span style=\"color: #ff9900;\"><strong><a style=\"color: #ff9900;\" href=\"https:\/\/dreamhomefinancing.com\/category\/Buying-a-Home\/\">Buying a Home<\/a><\/strong><\/span><\/p>\n<p><span style=\"color: #ff9900;\"><strong><a style=\"color: #ff9900;\" href=\"https:\/\/dreamhomefinancing.com\/category\/Home-Improvement\/\">Home Improvement<\/a><\/strong><\/span><\/p>\n<p><span style=\"color: #ff9900;\"><strong><a style=\"color: #ff9900;\" href=\"https:\/\/dreamhomefinancing.com\/category\/Real-Estate\/\">Real Estate<\/a><\/strong><\/span><\/p>\n<p><span style=\"color: #ff9900;\"><strong><a style=\"color: #ff9900;\" href=\"https:\/\/dreamhomefinancing.com\/category\/Home-Finances\/\">Home Finances<\/a><\/strong><\/span><\/p>\n<p><strong>We can help you to find a home improvement lender in the following states:<\/strong>\u00a0Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Refinance for Home Improvements &#8211; Home Improvement Loan If you are looking to refinance for home improvements, then you will likely be searching for a home improvement loan or sometimes&#8230;<\/p>\n","protected":false},"author":1,"featured_media":4083,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_kadence_starter_templates_imported_post":false,"_kad_post_transparent":"default","_kad_post_title":"default","_kad_post_layout":"default","_kad_post_sidebar_id":"","_kad_post_content_style":"default","_kad_post_vertical_padding":"default","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"footnotes":""},"categories":[190],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/dreamhomefinancing.com\/wp-json\/wp\/v2\/posts\/4075"}],"collection":[{"href":"https:\/\/dreamhomefinancing.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dreamhomefinancing.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dreamhomefinancing.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dreamhomefinancing.com\/wp-json\/wp\/v2\/comments?post=4075"}],"version-history":[{"count":15,"href":"https:\/\/dreamhomefinancing.com\/wp-json\/wp\/v2\/posts\/4075\/revisions"}],"predecessor-version":[{"id":6331,"href":"https:\/\/dreamhomefinancing.com\/wp-json\/wp\/v2\/posts\/4075\/revisions\/6331"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dreamhomefinancing.com\/wp-json\/wp\/v2\/media\/4083"}],"wp:attachment":[{"href":"https:\/\/dreamhomefinancing.com\/wp-json\/wp\/v2\/media?parent=4075"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dreamhomefinancing.com\/wp-json\/wp\/v2\/categories?post=4075"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dreamhomefinancing.com\/wp-json\/wp\/v2\/tags?post=4075"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}