Underwater Mortgage? No Equity Home Improvement Loan Options

by Mark Thompson on March 29, 2012

As we all know, the housing bubble has popped. This has put a strain on people who were hoping to use the increased monetary value of their homes to perform some much needed home improvements. The crash in home values across the nation means there are many people who are now living in houses that have not built up any added value over the past couple years.

In a growing housing market you can buy a home 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. So if you bought a home for $175,000 five years ago it might actually be worth $190,000 now with normal economic growth. You would then be able to borrow money against that added value from a bank and use that money to upgrade your house.

These days many home prices have actually plummeted 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 added home value which is known as “equity.”

If you’re looking for a large home improvement loan then you may want to think about applying for an FHA Title I 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 20 years. Just about any one who owns a home can apply for an FHA loan and eligibility is less severe 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.

Another good way to keep the high price of a home upgrade project down is to do at least some of the work yourself. There are lots of easy amateur 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 projects the highest expense often comes from the amount of manual work involved, so by taking on some of that work yourself, you can really reduce the total cost of the overall job.

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

Want to read about more ways you can apply for specialized equity bad credit home improvement loans? There are lots of different home improvement loan options available today depending upon your credit score and home value.. This article, Underwater Mortgage? No Equity Home Improvement Loan Options has free reprint rights.

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