Your Home’s Equity: Most home improvement loans are secured loans, meaning they are at least partially based on the amount of collateral you have to offer to the bank. The most common form of collateral is the amount of equity, or extra value above the amount owed on your mortgage, that you have in your home. If you’ve been paying your mortgage for a number of years then you most likely have at least some equity, though the bursting of the housing bubble have left a record number of homeowners upside down on their mortgages. You can get an estimate of your home’s equity by using various home value estimation tools on the internet or you can simply look at the prices that some of the homes in your area recently sold for. Most banks will actually send out a professional home value estimator to look at your home’s exterior and interior before finalizing your home improvement financing. Obviously, if you have an upside-down mortgage, then equity won’t be a factor in your home improvement financing plan. In that case you may need to apply for a more unconventional unsecured home improvement loan.

Home Improvement Estimates: A lot of people go into the loan process with only a vague notion of how much money they need to complete the project. It’s difficult to get a loan from a bank without having a fairly specific list of how you’re going to use the money they give you. You’ll want to work with a contractor or the company that is going to be doing most of the work for this step. The more detailed your estimates, the better. Contractors will often be open to giving you several “levels” of quotes for different affordability options. If you were having your kitchen remodeled you might get a quote that includes stainless steel appliances and granite counter tops, one that includes standard appliances and standard countertops and one that simply has builder’s grade materials.

Neighborhood Comparatives: When you’re improving your home there is such a thing as “doing too much” to it. Generally, you want your home have the same features and square footage as most of the other homes in your area. Turning your home into a 5,000 square foot house when most of your neighbors only have 1,300 square feet may actually prevent your home from ever reaching it’s full potential in value. Whether you’re doing interior remodeling or putting an addition on your home, it will help if you can find some comparative examples of other houses in your neighborhood with the same or similar updates. Banks want to be sure that their money is being invested wisely and could warrant a return on their investment if they ever had to take over your property as a result of non-payment on your part.

Your Monthly Income: To pay back the loan you’re going to most likely need some proof of a steady income. Past paychecks will often work for this, though if you’re self-employed you may also need to provide copies of tax forms for the past several years so that your bank or lender will see that you have a viable business with steady income. If you’re just starting a business or if you’ve just change jobs you may have a more difficult time convincing a bank that you can afford to make regular payments. Along with your income it is often a good idea to have a current list of monthly expenses and bills on hand so that you can show that you have money to spare at the end of the month and you can afford a loan for your home improvements. Be sure to separate out any expenses you have already put towards you home improvement or any charges you have on a home improvement credit card. They can serve as proof that you’re serious about your home improvement project (as long as you can afford it).

Talk To Your Lender: This should often be your first step, but it sometimes helps to have a lot of the other things in place anyway. Even if your specific lender doesn’t need everything listed above, it’s still a good idea to have most of them on hand just so you can make an informed decision about your home improvement financing options. You may decide that you don’t need a loan or that can’t afford one, based on the other pieces of information you’ve already compiled. If you haven’t decided upon a lender, then speak with each one to see what specifics each one requires. If you’ve already chosen where you’d like to apply for a loan, then speak with them or contact them and just make sure you know what paperwork is required. All lenders are slightly different and some may require a lot more documentation than others.

Your lender will also be able to properly determine if you qualify for a specialized loan package, such as an FHA home improvement loan or even a Veteran’s home improvement loan.

Getting financing for a home improvement project or home addition can be a lengthy process with inspections and paperwork and various estimates all needing to be signed and sent to various parties. Some lenders can grant home improvement loans in just a few weeks, while others may take several months. It’s a good idea to plan far ahead in advance and let the contractors you’re working with know that your schedules may be dependent upon your ability to get the proper home financing in a timely manner.

Make no mistake about it: 2010 is looking to be a pretty good year to start that large home improvement project even if it means borrowing money or financing the project. Home improvement retailers such as The Home Depot and Lowes are reporting better than expected sales and have begun to see larger projects and busier contractors coming in the door.

Two things are happening to drive the increased demand for home improvement. First, people who haven’t been able to sell their homes are giving up and taking the plunge into remodeling now that they feel the economy isn’t going to get much worse. And second, the overall cost of home remodeling has actually gone down over the past year or two as contractors and retailers have lowered their prices to stay competitive with one another. This demand, combined with the weak economy, has actually made for a very attractive home improvement loan environment. There are also a lot of people taking advantage of first time home buyer incentives and tax rebates and they are combining that extra saved money with a small home loan so that they can get a kitchen or bathroom upgrade that they otherwise couldn’t afford.

Here are some of the reasons you may want to go for a larger home improvement this year rather than put it off for another year or two:

Low Loan Interest Rates: Bank rates are still the lowest they’ve been in years for personal loans, mortgages and just about any sort of loan you can think of. Interest rates haven’t risen significantly yet, but as the economy picks up steam loans will begin to slowly get more and more expensive. This is a case of striking while the iron is still hot. Years from now people will look back at the home improvement loan rates of today and wish they could get a rate this low.

Low Contractor Rates: A lot of contractors are starting to get busier, but many probably haven’t raised their rates or really adjusted how they’ve done business for the last year or two. Many are still going to be grateful to get any chance at all for regular work. As the weather gets better and the home improvement season wears on more contractors are going to raise their rates just to deal weed out the serious offers from non-serious offers.

Home Prices Are Rising: This may not seem like a good thing, but it actually is. As home prices slowly begin to rise again it means that the value of what you are putting into your home is also rising. That means that if you spend $30,000 on a kitchen remodel this year and then decide to sell your home a year from now you could actually end up making money. Rising home values means people will begin to have more equity in their homes over time, which means the home improvement market will continue to grow as people begin borrowing against that equity again in the next few years.

Overall, this year looks as though it may be “the year” to apply for a home improvement loan. Banks are still being conservative with their money, but you may qualify for a special loan such as a VA home improvement loan, an FHA home improvement loan or any one of a number of state or local home improvement loans that we’ve detailed here in the past.

The Complete Idiot’s Guide to Barter and Trade Exchanges

Barter Directly for Home Improvement Services: This is one of the most obvious ways you can arrange to have someone work on your home without actually paying the person or company cash. The barter itself would have to be agree upon ahead of time and it’s usually easiest to barter with smaller contracting companies or independent owners than trying to deal with large corporations. Depending on the size of the job you could trade just about anything you own from a computer to a pair of skis to a car or even a boat! And remember: you can also barter with services. You probably have a lot of skills and talents you don’t even know about. Some of those skills could serve you as well as having the cash in hand. I have a friend who builds websites on the side and he just moved in to a new house. When he was shopping around for someone to refinish his hardwood floors he found a guy who needed a website. So he made a trade: two rooms of floor refinishing for one basic website. Both parties ended up happy!

Barter Indirectly for Home Improvement Services: You don’t have to just work out a deal with the contractor. Though less common, there are cases where you can indirectly barter with services or products involving a third party. There are some companies that offer this, but more often than not you can sometimes barter for home improvement services by just knowing lots of people. Indirectly bartering for home improvements and services occurs more often in tight-knit neighborhoods or even among family members.

Work For The Contractor: This is a form of direct bartering, but it’s a little more formal. My cousin needed new windows in his home a few years ago, so he worked out a deal with local window company that he would help the company on Saturdays during the busy summer months in exchange for having a certain number of windows installed at his home for free. He learned on the job and now actually works for the guy every summer just to make some extra cash!

Neighborhood Loans for Home Improvement: These types of loans aren’t common, though there are many different ways you could look at a neighbor-to-neighbor home improvement loan. Again, this occurs more in communities where everyone knows each other, but if an elderly person in the neighborhood needs something done I’ve read about neighbors getting together and pitching in with their time and money. Fixing up a house that’s fallen on tough times can be incredibly helpful to the homeowner, but can also boost the value of the other homes in the area with the increased curb appeal.

These are just some of the ways you can “pay” for a home improvement without really paying for it with cash. If you find the right contractor or handyman you can often get some amazing work done on your home for a fraction of the cost of what it might normally cost.

The Facts about VA Home Improvement Loans
The VA home improvement loan by definition is not a loan in the truest sense. It is known as a loan guaranty process. This is because the Veteran’s Administration is not a lending institution or banker. However the Veterans Administration pledges the full repayment of the loan originated through a lending source. This guaranty naturally reduces the risk to the lending company. There are lower rates of interest associated with the VA Home Improvement Loan and the loan is available to all veterans of the military.

The amount of money veterans can borrow varies, though you will need to apply for the loan in the state where your home is built. There is no fee or penalty for early termination of the loan through a payoff. The total amount of a VA loan for home improvement cannot exceed 90 percent of the value of your home and there are some additional restrictions placed on the loan amount depending upon where you live.

Increasing a home’s energy efficiency is a popular home improvement, and many veterans can borrow up to $6,000 for just that purpose without having their home’s value assessed beforehand. For loans between $3,001 to $6,000 you may need to show that your utility bills were reduced because of the repairs or improvement you paid for. For energy efficient improvements under $3,000 you generally only have to present the receipt for the item to the loan vendor.

Who is Eligible for a VA Home Improvement Loan?
The first thing to do in order to determine eligibility for VA Home Improvement Loans is to attain an automated certificate. The database that provides certificates in this regard may not be current as it does not always have data on each person that applies. The best thing to do if the database that generates the certificate of eligibility does not have your name on file is to fill out a form referred to as a certificate of eligibility (Form 26-1880). Forms may be obtained by visiting the official website for VA Forms. You may also do this at the eligibility center correspondent with your section or region of the country or through the mail.

Individuals who have credit issues with regard to attaining VA home improvement loans will want to receive credit counseling. Additionally you should be receiving a fairly substantial income as this is crucial in your attaining a VA home improvement loan. The guaranty will only be applicable if you have the revenue in order to support the monthly loan amount. If the preceding stipulation is not in place you will simply not qualify. It is important to “put all your ducks in a row” financially before filling out the certificate of eligibility.

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Using VA Loan Money
Certainly if you qualify for VA home improvement loans and grants you may use the money for any purpose. The lender or the officials at the Veteran’s Affairs office are not particular about the use of the loan or grant. In example, you may use a loan for the purchase of a “fixer upper” and use what remains for improvements. Home improvements such as new windows, new doors, a new roof, a new furnace and even an electronic thermostat are all things that can be paid for with a VA loan.

Further, it should be noted grants are monies that needn’t be paid back. In order to determine if you qualify for grants it is recommended you visit the government site for further information.

If you are a veteran and need money to upgrade or repair your home, then a VA home improvement loan is definitely something you should look into. You may also want to visit the remarkably detailed (and somewhat confusing) VA Home Loan website. As a veteran you gave a lot for your country and being able to get a VA loan is one way your country can thank you. You owe it to yourself to look into a VA loan for home improvement for other needs you may have. Remember: The Department of Veteran Affairs does not actually loan you the money, but they do guarantee the loan. You’ll need to talk to individual credit and lending institutions (or even us an online loan company) like your local bank or credit union to actually apply for the loan itself.

Like banks, local municipalities have a big interest in helping homeowners keeping their homes from falling into disrepair. The nicer the homes are in any given town or state, the higher the home value and the more people will want to move to that city or town. Lots of states offer home improvement loans and grants, but now more and more cities and even counties are doing the same, either with tax money collected from other constituents or with privately raised money. Here are a few good examples:

San Diego, CA - The San Diego Housing Enhancement Loan Programs (HELP) are city loans which are aimed at helping homeowners in San Diego improve their homes in order to make their neighborhoods more appealing destinations. Qualification is based on a number of criteria, but the home improvement loans can help residents pay for interior as well as exterior home improvements such as painting, replacement windows, new doors, roof replacement, plumbing upgrades and even drought-resistant yard and landscaping improvements.

Knoxville, TN - The Knoxville My Front Yard Program gives eligible residents up to $4,999 in home improvement loans which could be completely forgivable if certain restrictions are met. Knoxville gives out these home improvement loans, which often become home improvement grants, if the resident then stays in the home for an additional five years. The idea is to keep residents living in their neighborhoods by taking pride in where they live and increasing the community’s appeal to others at the same time.

Chicago, IL - Chicago has ever different home loan programs, one of which is through the Neighborhood Housing Services (NHS) organization. They offer affordable fixed rate home improvement loans for residents in Chicago and Elgin to help home owners upgrade the efficiency, safety and desireability of their homes. They also offer some home and building rehabilitation loans as well as some forgivable home loans to help move more lower income residents into a home of their own.

New York City, NY - The massive New York City Department of Housing Preservation and Development (HPD) helps all sorts of people and organizations in New York City repair and update buildings and homes in the city. The HPD offers a number of different building rehabilitation loans that building and home owners can take advantage of.

For the same reason that many of these municipalities and cities are interested in giving its residents affordable home improvement loans, so are local banks. In fact, local neighborhood banks often approve home improvement loans that larger banks might not. Local banks have much more to gain by having their local communities and neighborhoods increase their home value with improvements and upgrades. The more desireable a neighborhood or city becomes, the more businesses and other residents will want to move to that city and more people means more customers for the local banks!

The swimming pool construction business is very seasonal and is almost always slowing down around the end of summer and early autumn months. Swimming pool financing and construction companies are always the most eager to cut deals and offer good pricing around this time because it’s when sales are the slowest. Late summer and early fall is almost always the best time to go shopping for a swimming pool loan, though many lending institutions will offer special deal all year now. Swimming pool sales, planning and even some preliminary construction almost always begins to put up again after the Christmas and New Years holidays.

Financing a swimming pool is a little harder now than it has been in the past, partially because swimming pools do not significantly raise the value of a home but primarily because of the drop in overall home values around the country. In the past most homeowners were able to get a home equity line of credit or a home equity loan based on the growing value of their house to pay for a swimming pool in advance. Lower home values means that not as many people can borrow the money required for a swimming pool, which can be anywhere from $15,000 to $50,000 for larger pools.

That means that the people who are putting swimming pools in at their homes have often been living in their homes for a long time and have significant equity built up over the years. You can still buy a home and then immediately turn around and borrow money to put in a new pool, but that’s generally only done now when you’re able to buy a home below market value so that the moment you move in you have plenty of equity available.

While it may be harder to borrow the money to build a swimming pool, it certainly isn’t impossible. There are still plenty of swimming pool financing options. Many local banks and lending institutions do still want to give out swimming pool loans because it does help raise the value around the neighborhood moderately and people who buy swimming pools are likely to stay with the same bank for years to come. It should be noted that you cannot use a HUD or FHA Title I loan to pay for a swimming pool, but in some cases building a pool is a valid home improvement that is may make you eligible for a tax deduction. Here are some tips to getting a good deal on a loan for a swimming pool’s construction:

Compare loan options first: Before looking at swimming pools, first go shopping for a loan. Try local banks first and work up to larger institutions. You’ll most likely have to know the value of your home, the amount of money you still owe on it and have proof of income. Even if you don’t have any home equity there are still lots of things you can do to improve your chances of getting an unsecured loan from a bank. Buying a pool, like buying a new house, is much easier if you are pre-approved for a specific loan amount in advance. This also helps you set a budget and prevents you from overspending on your swimming pool. The more quotes for loans you have, the better, because it means you’ll be able to compare and contrast each loan offer and even go back to financial institutions and ask if they can be more competitive in their rates.

Consider a partial swimming pool loan: One of the most obvious ways to make a swimming pool more affordable is to have some of the money available. You can try saving up the money or you can think about selling something to raise the money needed to pay for a swimming pool. Swimming pools require maintenance and tend to take up a lot of time, so you may want to consider selling something that you won’t be using as much once you get a swimming pool. Lots of people choose to sell boats, motorcycles and even cars to help pay for a new swimming pool. Some families postpone or cancel family vacations for years in order to pay for a new swimming pool.

Watch the fine print: When you’re financing a swimming pool you’ll likely have lots of different contracts and agreements to look at, from the loan agreement to the construction agreement to the excavation agreement, all of which could be from different companies. Watch for hidden fees based on unforeseen delays, balloon payments and other contract riders which could increase the amount you are paying for your swimming pool unfairly. It may be worthwhile to pay a contract lawyer to look over all your agreements and contracts before you sign.

Plan for added swimming pool maintenance costs: While the price of a swimming pool might be $20,000 on paper, the true cost may be much more. You’ll have to maintain your swimming pool throughout the year with special services, chemicals, upgraded pool equipment and more, so be sure to include that in your budgeting. One good way to handle this is to build the initial swimming pool loan with some extra cash available for pool maintenance for the first year. That way you can discover how much money you’ll need each year to maintain your pool without going bankrupt the first summer you have it.

Consider swimming pool construction company financing: Swimming pool companies know that their products are expensive, so they often offer their own financing deals. Most swimming pool companies have special arrangements with local banks that can loan you the money to pay for a swimming pool. The percentage rate is usually a little higher than a straight bank loan but they can be a good way to borrow money for a swimming pool if you have nothing else available. Some swimming pool construction companies can offer both unsecured and secured home improvement loans. These should usually be your last resort, simply because they are almost always the most expensive.

Adding a swimming pool to an existing home is a great way to relax during the summer and improve your home’s comfort. And while an inground swimming pool may slightly increase the value of a home, an above ground swimming pool almost has no effect at all on a home’s overall selling price. That being said, you should not plan to put in a swimming pool and recuperate all your costs in your home’s value.

Applying for a swimming pool loan should be a personal decision that is made for the sake of you and your family’s desires and not for the express purpose of selling your home to someone else. Yes, swimming pool financing is sometimes difficult to get, but you’ll forget that when you’re lying in the hot summer sun lazily drifing around your pool of clear cool water with a drink in your hand!

And while taking out loans and financing your home improvement project is almost a given these days, it still makes sense to try to reduce the amount of money you borrow, and ultimately have to pay back. You can do this in a number of ways from only tackling small, less expensive home improvement projects to breaking your home improvement projects into stages, to merely scaling back exactly what you want to do to you home. Really, the goal in any home improvement project is to get the most “bang for your buck” which means you want to try to reduce the overall cost while still improving your home as much as you can.

Generally speaking there are two different “expense types” in any home improvement projects. There are material expenses which cover all the building materials, tools, and other physical items which go into a home improvement project and there are the labor expenses. You can control both and keep them low if you plan carefully.

Material expenses can be kept low by choosing materials and building supplies that are on sale or being discontinued. You can sometimes buy surplus materials from warehouses or even from companies and contractors who happen to have items left over. There is only so low you can go with most building materials.

Labor is another matter on many home improvement jobs. Sure, some home improvement contractors offer specialized services, but a lot of home improvement can be done by just about anyone who is willing to roll up his or her sleeves and get a little dirty. Remember that any home improvement job really has lots of different steps and just about any step you can do yourself can save you money.

When I was having my kitchen floor replaced the flooring company was going to charge me $150 for each layer of vinyl flooring they had to scrap up before they put down the new floor. I pulled up one corner of the kitchen and found 3 different layers, which would have really added to the overall cost of my floor. Instead I went out to the hardware store and bought one large and one small metal flooring scraper for a total for $40. Over the next week I spent and hour or so a day scraping up and ripping up flooring until my kitchen floor was down to the concrete slab. The flooring guy came in, complimented my job and I ended up saving $450 in the process! As for the scraping tools, I still have them and have used them in several smaller projects as well! Even minor things like cleaning up the job site after the job or doing demolition work all costs you money, so if you do it yourself you won’t end up paying for it out of your own pocket!

Even if you’re not an expert home improvement do-it-yourself kind of guy or gal or want to spend hours and hours of time working on your home, even the smallest things can help a contractor and reduce your overall costs. I didn’t know anything about floors, but I sure could bang and scrape my way to concrete! Be sure to speak with your home improvement contractor before you sign and paperwork and try to work out the best way for you to still use his services while saving you some money.

This is a joint effort of local Community Development as well as the US Department of Housing and Urban Development and it covers the 16 square mile empowerment zone of most of Knoxville, TN that is home to nearly 48,000 people. The loans are forgiven at 20 percent a year for each year you continue to live in the home, so after 5 years the loan is completely forgiven and the money essentially ends up being a home improvement grant that never has to be repaid.

The home improvement loans are designed for exterior home improvements including, but not limited to, exterior doors, gutters, landscaping, roof repairs, porch repairs, shutters, driveways, sidwalks, accessibility ramps, siding, painting and even exterior lighting. The Housing Manager for the Community Development Department has explained the program as a good way for homeowners to improve the value of their home by increasing curbside appeal. The loan is designed to help people improve their homes and then reward them by staying in those homes for the next five years and continuing to care for and maintain their investment.

Improvements to just a few homes in any single neighborhood can actually increase the home value of other houses in the surrounding area. Participants in Knoxville’s “My Front Yard” program have been overwhelming enthusiastic about how easy the loan process is and how good their homes look after the improvements.

Knoxville has worked with over 30 homeowners so far and still has funding available for more. After applying for the home improvement grant inspectors will make sure your home is in good enough structure condition for improvements. Problematic homes might also be eligible for home improvement financing and low-interest loans through the “Owner Occupied Rehab” program which is also part of the EZ home repair program. If you’re interested in learning more you can call 865-215-2120 or visit the city of Knoxville’s Development Department’s website.

In a rising housing market you can buy a house value one year and in the next year the value of the home will actually increase by a few percentage points from one year to the next. You would then be able to borrow money against that added value from a lending institution and use that money for a big home repair project. So if you bought a home for $175,000 a few years ago it might actually be worth $185,000 today with normal economic growth.

These days many home prices have actually dropped in the past year or so, which means a lot of people are now paying for homes that are now worth less than what they originally paid. When you owe more cash on a house than what it is valued at then you are said to be “underwater” with your mortgage payments. This means they don’t have that extra home value which is known as “equity.”

If you’re searching for a big home remodeling loan then you may want to think about applying for an FHA home improvement loan from an eligible loan partner. There are lots of sellers of these kinds of loans, they offer a low interest rate and you can be eligible to pay it off over a generous 15 years. Just about any one who owns a home can apply for an FHA loan and eligibility is less restrictive than most traditional lending institution loans. You do not have to have equity in your home to apply for a Title I home improvement loan.

LendingClub is a peer-to-peer service that offers personal loan rates that are much lower than a bank. You can create a free account to learn more!

If an FHA loan isn’t going to work for you and your credit is still decent, try an online home improvement loan from a financial institution like the LendingClub. They offer personal loans that have a much lower interest rate than a bank, they are one of the few growing financial organizations out there, and they are community-based, so its really a lot of people helping each other.

Another great way to keep the costs of a home upgrade project down is to do at least some of the labor yourself. There are lots of easy DIY home improvement jobs most people can do around their homes with just a little bit of know-how and some elbow grease. For many home improvement jobs the highest expense often comes from the amount of manual work involved, so by doing some of that work yourself, you can really reduce the total cost of the overall job.

Most manageable house repairs can become major headaches if they are allowed to go unaddressed for too long. If you have a serious house repair that needs to be done, don’t let your home’s dropping value prevent you from getting the money you need to make the repairs. And, as expected, big home improvements always end up costing more than the small ones.

First, banks are still being very conservative about lending any money at all and since most banks specialize in secured home improvement loans, the news isn’t good. Housing prices are still dropping and leaving many homeowners without enough equity to take out the traditional Home Equity Loan or Home Equity Line of Credit (HELOC). That means that banks aren’t going to be jumping up and down to hand out money.

Another whammy for people wanting home equity loans is the rising bank interest rates. The interest rates on most bank loans are still much lower than they’ve been in the past, but they’re starting to creep up, which means there will likely be even less home improvement financing though traditional bank loans in the upcoming months.

This does not mean, however, that home improvement across the nation has come to a standstill. Both large national home improvement stores The Home Depot and Lowe’s have recently stated that their outlook for the rest of the year is not quite as bad as they originally expected. Both home improvement stores are limiting expansion, trying to improve the customer experience and aiming to cut costs.

While large home improvement projects are still being delayed due to a lack of equity and the inability to take out a large home improvement loan, smaller home improvement projects, many that may require an unsecured home improvement loan, are still popular because there are so many people choosing to stay and improve their own homes rather than selling and moving to a new house. It doesn’t hurt that The Home Depot offers several low interest home improvement credit cards and Lowe’s offers their own home improvement credit options to entice customers into their own stores.

While banks may not be lending money for home improvements very readily, there are some alternative options. You may qualify for a Title 1 FHA home improvement loan depending upon your situation or, if you’ve got a small home repair or upgrade project you can try getting an online home improvement loan through the Lending Club. They offer rates better than most banks, but you do need to have a decent credit score.

Don’t shy away from doing home improvements if you can actually afford to do them. Most home improvements, even minor ones, can increase the value and pleasure you get from living in your house. When housing prices begin to rise again (and, don’t worry, they will) then you’re home’s value will rise faster than comparable homes in your area without those improvements.