8: A home improvement loan with no home equity?by Tim Manni
Number eight on our top-10 list for 2013 is “A home improvement loan with no home equity?” This article is yet another “oldie but goodie.” When it was written in 2010, homeowners across the U.S. were dealing with a home-equity crisis. The downturn in home prices had stripped out thousands of dollars in home equity, even to a point where many homeowners had negative equity.
Home equity is a very important thing for homeowners. Home equity allows you to leverage the money you’ve paid into your home towards a loan that could allow you to pay for any number of things—from home improvement projects to a college education.
But how could a homeowner with little to no equity get money for home improvements?
FHA Offers Two Options for Funding Home Improvements
You might know that the Federal Housing Administration (FHA) can help you fund your home renovations, from room additions to smaller maintenance projects. Of course, the best FHA loan program for you depends on your situation and your needs. You can choose the “FHA 203(k)” mortgage for larger projects — buying a fixer-upper or refinancing your home while also funding a home improvement. Another option is FHA’s “Title 1″ loan, which allows you to finance your smaller renovation and isn’t tied to a refinance or home purchase. For either of these loans, you need to go to an FHA-approved mortgage lender.
Be sure to read “A home improvement loan with no home equity?” in its entirety.