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Getting a Home Improvement Loan Without Using Equity

Your home is your fortress, you should feel safe and comfortable within its four walls. Sooner or later you’ll want to improve parts of your home to help make it the paradise it’s should be. While a home improvement can greatly enhance the quality and look of your home, it can be costly to make the improvement you desire. For this reason, you might want to consider a home improvement loan. However, without equity, it can be a bit difficult, but possible, to get a low-interest home improvement loan. The following are a few options to consider when securing a home improvement loan without equity.

FHA Title 1
If your home has little to no equity, you may want to consider an FHA Title 1 home improvement loan because it does not require any equity. FHA Title 1 loans can be beneficial to you if you have not had the resources to put enough equity into your home or if your home has depreciated since you purchased it. Also, this type of loan does not require appraisers to determine the worth of your house before approving your loan. However, you must have a good credit standing to qualify and get low-interest rates for the loan.

Energy Efficient Mortgage (EEM)
An EEM is another option to consider if you do not want to get an FHA Title 1 loan. This type of loan is recognized by the federal government and is ideal for energy-saving measures, such as a new HVAC system. It requires no equity as well and you can apply for it immediately after you get your house mortgage.

Primary/Purchase Mortgages
These are a different class of home improvement loans you may want to consider as well. Some types of purchase mortgages include the FHA 203(K) and Fannie May HomeStyle Renovation Mortgage. Such loan types provide you with a single loan which you can use to buy a house and make improvements. However, the largest amount which you are permitted to borrow is tied to the expected value of the home after improvements have been made.

Contractor Loans
If you are lucky enough, you can find home improvement contractors who offer you their own financing. Such loans may include roofing, new windows, cooling & heating systems, flooring, etc. The downside to a contractor loan is that you have less leverage when negotiating the price. Also, interest rates for this loan can sometimes be higher than other regular low-interest home improvement loans.

Personal Loans
Personal loans from a bank or a lender are another option you can pursue. You can request this type of loan using your credit profile and income. Your interest rate for a personal loan is going to vary depending on the quality of your credit profile and your ability to pay back the loan quickly. A longer loan term will normally carry a higher interest rate, while a shorter loan term may have lower interest rates.

American Direct Financial provides low-interest home improvement loans and other types of personal and business loans with low interest rates. Apply now to get your loan quickly and start your home improvement immediately!

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