The housing bubble has burst and because of the downturn in home values across the nation there are a lot of people who are now living in houses that have not built up any added value over the past couple years. This has put a strain on people who were hoping to use the increased monetary value of their homes to perform some much needed home repairs.
In a normal housing market, you can buy a home one year and in the next year the value of the home will actually increase by a few percentage points from one year to the next. You would then be able to borrow money against that added value from a bank and use that money for a big home improvement project. So if you bought a home for $150,000 a few years ago it might actually be worth $185,000 today with normal economic growth and not actually doing anything.
These days many home prices have actually plummeted in the past year or so, which means a lot of people are now living in homes that are now worth less than what they originally paid. This means they don’t have that extra home value which is known as “equity.” When you owe more money on a house than what it is worth then you are said to be “underwater” with your mortgage.
If you’re looking for a big home remodeling loan then you may want to think about applying for a Title I home improvement loan from an eligible loan partner. There are lots of sellers of these kinds of loans, they offer a low interest rate and you may be eligible to pay it off over a generous 20 years. Just about any one who owns a home can apply for an FHA loan and eligibility is less restrictive than most traditional lending institution loans. You do not have to have equity in your home to apply for an FHA Title I home improvement loan. Title 1 can be used in connection with 203k rehabilitation mortgage.
More info available here: http://www.hud.gov/offices/hsg/sfh/title/ti_abou.cfm for the FHA Title 1 Home Improvement loan
Most small home repairs can become major headaches if they are allowed to go unaddressed for too long. If you have a serious home repair that needs to be done, don’t let a lack of equity prevent you from obtaining the money you need to make the improvements. Neglected home repairs will accentuate your decreased home value & in many cases, even accelerate it.
There are many different home improvement loan options available today depending upon your credit score and home value. Need to learn about more ways you can qualify for specialized home improvement loans? Freedom Builders & Remodelers works with several mortgage brokers and banking individuals.