| If you need a new guest room or want to remodel | | | | government program aimed at helping borrowers |
| your old kitchen to meet modern standards, you should | | | | improve their homes. This loan doesn't cover certain |
| look into getting a home improvement loan. These | | | | improvements like swimming pools that are considered |
| loans use your current home as equity. | | | | a luxury and not a necessity for the borrower. With |
| There are two types of home improvement loans | | | | this loan, the borrower need not have equity in the |
| available, traditional home improvement loans and FHA | | | | home for collateral. The payment period here can be |
| Title I Home Improvement Loans. Both the loans | | | | for as long as 20 years and is available for those who |
| require the borrower to be the owner of the house or | | | | have past credit problems, as long as they show |
| for the borrower to be buying the home. | | | | some recent acceptable credit. As the requests here |
| The traditional home improvement loan states that the | | | | are usually under $7,500, no lien is taken on the home. |
| borrower should have a substantial equity of 20 | | | | Homeowners prefer this loan because the |
| percent or more in the home. This, along with the | | | | requirements are not that stringent and the interest is |
| improvements to the home is the collateral for the loan, | | | | tax deductible. |
| and is for ten years or less. The interest paid here is | | | | So remember, this loan has a lower interest rate than |
| tax deductible and is lower than the interest on | | | | other loans and is less risky. The only criterion for the |
| personal loans. | | | | loan is that the borrower must own the home, or at |
| The FHA Title I Home Improvement Loan is a U.S. | | | | least be making payments on the home. |