Home Improvement Loan Honolulu HI
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7 Steps to a Home Improvement Loan
Written by Matthew C. Keegan // 2011/11/21 // Financing , Home Financing // No comments
Financial steps to securing a home loan.
Is your home in need of a makeover? Will you bear these costs out of pocket or will you need to seek a home improvement loan? If your decision is the latter, then you have some points to consider and steps to take before you begin your important project. With careful planning you can secure a loan, hire a general contractor and have the home you want within months.
1. Plan your project — You may have a general idea of what you want to have done, but now is the time to get specific. For example, if you want to renovate your kitchen, what will that project entail? Cabin refacing, new countertops, replacing appliances, expanding the kitchen’s footprint or doing whatever else should be done must be determined. You’ll submit this information to contractors who will give you a quote based on your details. A good contractor will supply a detailed bid, so get at least three before moving forward.
2. Check your credit — Before applying for credit, you’ll want to ensure that there are no problems on your credit report. Obtain copies of all three credit reports (Experian, Equifax and Trans Union) and have errors corrected or outdated information removed first, and then get your credit score. Your credit score will go a long way in determining whether you get a loan or not and what terms you’ll be offered including the all-important interest rate.
3.Consider your loan options — If you have built up sufficient equity in your home, then a home equity loan be right for you. If not, a personal loan may do. Explore your loan options to see which type of loan fits best with your income and lifestyle.
4. Shop for a loan — Contact your current bank for loan options as well as competing financial institutions. Consider your credit union, too, for loans at lower rates. Ask lenders what fees you’ll have to pay including application and closing costs. A .25 difference in interest rate could be erased if the bank’s fees are high.
5. Assemble your financial documents — Plan on presenting plenty of paperwork to your lender following your application for a home loan. This paperwork will most likely will include your state and federal income tax filings for the past year or two, your W2s, bank statements and other documentation.
6. Talk with a financial advisor or an attorney — You don’t want to be saddled with a loan you can’t pay back or one that doesn’t offer a maximum tax benefit — a tax attorney can help you there. If your loan is particularly larger or complicated, you may want to run it past your attorney who can advise you on your options.
7. Sign your loan — When you’re satisfied with the loan, the terms and repayment parameters, then sign your loan documen...