People who are already home “owners” can often borrow money against the equity (amount of ownership they have in their home) to make improvements to the home.
Usually, you need to have a fair amount of equity in your property in order to borrow more, but there have been times when lenders have offered up to 125% of a home’s value to be borrowed.
Things to expect when looking for a home improvement loan may include things like a specific list of improvements to be made, estimates of costs from qualified contractors, plans, permits, etc. It depends on the type of loan you use, as a mortgage doesn’t have to specifically be purposed for “home improvement”, but can, for example in a cash-out refinance, be used to make improvements in addition to paying off some credit cards or whatever else you think best.
A home equity line of credit (HELOC) is a common loan product people use to finance the improvements of their homes, which acts sort of like a credit card guaranteed by the home. As always, it is highly recommended that you learn as much as possible about any loan product that you buy (yes, getting a loan is the same thing as “buying” money).
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