How You Can Afford A Home Improvement When You Have No Equity
Due to the downturn in home values across the nation there are a lot of people who are now living in homes 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 financial value of their homes to perform some much needed home repairs.
In a growing housing market you can buy a home value one year and in the next year the value of the home will actually grow by a few percentage points from one year to the next. So if you bought a home for $175,000 five years ago it might actually be worth $185,000 now with normal economic growth. You would then be able to borrow money against that added value from a lending institution and use that money to upgrade your house.
These days many home prices have actually dropped 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 cash on a house than what it is worth then you are said to be “underwater” with your mortgage.
Fortunately you can still pay for home improvements even without having equity in your home. If you’re searching for a big home repair loan then you may want to think about applying for an FHA Title I home improvement loan from an eligible loan partner. You do not have to have equity in your home to apply for an FHA Title I home improvement loan. Almost any homeowner can apply for an FHA loan and eligibility is less severe than most traditional bank loans.
Another great way to keep the high price of a home improvement project down is to do at least some of the work yourself. There are lots of affordable amateur home improvement things most people can do around their homes with just a little bit of know-how and a willingness to work. For many home improvement jobs the highest expense often comes from the amount of manual labor involved, so by doing some of that work yourself, you can really reduce the total cost of the overall project.
Most small home repairs can become large headaches if they are allowed to go unfixed for too long. If you have a serious home repair that needs to be done, don’t let your home’s dropping value prevent you from obtaining the money you need to make the improvements. And, as expected, big home projects always end up costing more than the little ones.
Want to read about more ways you can qualify for specialized equity bad credit home improvement loans? There are many different home improvement loan options available to veterans depending upon your credit score and home value.