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Considering a home improvement loan? When home prices rise, more homeowners tend to stay put and make home improvements rather than buying a higher priced home with additional rooms or upgraded fixtures and contruction features.
Home improvement loan rates are also a factor. While higher lending rates can deter some from moving up to a bigger home, changes in rates for home improvement loans may not equate to much of a difference in monthly payments, depending on the loan amount.
As home equity goes up, it increases the potential availability of cash for home improvement since most lending sources for home improvement loans are equity-based rather than asset-based.
A strong housing market gives lenders a stable foundation for relaxing the qualifications of home improvement financing, putting more money into the pot for remodeling, repairs or improvements.
In addition to an upgraded living space, another financial benefit of a home improvement loan is the potential tax write off for the interest portion of loan used to fix up an owner occupied home.
Typically, financing for home improvements can be used to hire a contractor, or do-it-youself projects. A room addition or major remodel will no doubt require the necessary permits.
Fixed home improvement loan rates are offered on installment types of loans with various terms ranging from 5 to 30 years on average, while rates can vary monthly for a line of credit.