The housing bubble has burst and because of the crash in home values across the nation there are a lot of people who are now living in houses that have not built up any added value over the past couple years. This has put stress on people who were hoping to use the increased financial value of their homes to perform some much needed home upgrades.
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 grow by a few percentage points from one year to the next. So if you bought a home for $180,000 five years ago it might actually be worth $185,000 today with normal economic growth. You would then be able to borrow money against that added value from a bank and use that cash to upgrade your house.
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.”
Luckily you can still afford home improvements even without having equity in your home. If you’re searching for a big home repair loan then you may want to think about applying for an FHA Title I home improvement loan from an eligible loan partner. You do not have to have equity in your home to get a Title I home improvement loan. Almost any homeowner can apply for an FHA loan and eligibility is less severe than most traditional lending institution loans.
Another good way to keep the costs of a home improvement project down is to do at least some of the work yourself. For many home improvement jobs the highest expense often comes from the amount of manual labor involved, so by taking on some of that work yourself, you can really shrink the total cost of the overall job. There are lots of easy amateur home improvement jobs most people can do around their houses with just a little bit of know-how and a willingness to work.
As expected, large home improvements always end up costing more than the small ones. Most manageable home repairs can become major headaches if they are allowed to go unfixed for too long. If you have a serious home repair that needs to be done, don’t let a lack of equity prevent you from obtaining the cash you need to make the improvements.
Need to learn about ways to pay for home improvements? There are lots of different home improvement loan options available today depending upon your credit score and amount of equity.
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Tags: equity, home improvement, home improvement loan, loans, money, Mortgage, Title I loan