What Is a Home Improvement Loan?
Whether you want to make a few upgrades to your kitchen and bathroom or you're looking to completely remodel your house, a home improvement loan will probably be necessary to finance the project, unless you've got a stash of cash lying around. Before you borrow, it's important to understand that a home improvement loan is specifically for work on your house, and not to be confused with a home equity loan, which can be used to pay for a number of other things. Loan Purpose A home improvement loan allows you to borrow money to fix up your home. This could mean anything from installing a new kitchen, adding another bedroom, finishing a basement or repairing a roof. As with any loan, the amount you can borrow to make home improvements depends on your credit history and your income. Lenders look at your loan-to-value ratio, which considers the value of your house and the amount you still have to pay on your mortgage. If you have some equity in your property and your credit a