Looking For A Home Improvement Loan, But

Loans To Improve A Home’s Energy EfficiencyThe government wants to help you save 10% to 50% on your utility bills with upgrades to windows, heating and cooling units, insulation, and other energy efficiency improvements.. And you can borrow up to the projected value of your home after repairs have been completed, since the government essentially guarantees the loan for lending companies.Taking out a second mortgage, also called a home equity loan, makes the best sense if your first mortgage has low rates. To encourage energy savings, the federal government has backed a number of loan programs with below market rates and favorable terms. Fannie Mae also offers $15,000 financing at below market rates with their Residential Energy Efficient Improvement Loan. In fact, there are a number of different types of loans available to you, depending on your remodeling projects.Home Improvement Loans With FlexibilityGovernment loan programs have a lot of restrictions.Keep in mind that no matter what type of loan program you choose, you should request loan estimates from multiple lenders to find the cheapest loan.For example, the FHA Energy Efficient Mortgage allows you to finance up to 5% (capped at $8000) of your property’s value without having to requalify for a loan.Veterans can also find refinancing help through the VA and state agencies. However, these loans cannot exceed the 90% appraised value of the property. So if you are looking for more flexibility in how you choose a contractor, how soon you complete the work, or what type of improvements you choose to make, then look for a home equity loan or cash out refi. These loans are called 203k loans. And all of these loan programs work in partnership with traditional lending companies.Looking for a home improvement loan, but don’t know your options? Most homeowners assume a home equity loan in the only way to finance upgrades or additions to their property.Loans For General Home ImprovementsHUD provides home improvement loans that require a minimum of $5000 in major repairs and upgrades to a property. Otherwise, refinancing your first mortgage while cashing out part of your equity will give you the lowest rates on financing.