What Types Of Loans Are Available For Home Repair?

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What Types Of Loans Are Available For Home Repair?

When buying a home, you also take on the responsibilities of a homeowner, and one of those is paying for home repairs. You may find that even minor repairs can cost a pretty penny. Fortunately, it is possible to obtain a loan to cover these expenses. There are several types of loans for home repairs including:

Refinancing Your Mortgage

If refinancing your mortgage is a viable option, then this can get you enough money to cover major repairs. Refinancing should be considered if you can still take advantage of the lower overall interest rate on your mortgage. It also helps if you can increase your monthly payments so that you can shorten the mortgage period.

If your credit is good, then your lender may consider lending you 80% or more of your home equity. Refinancing does come with closing costs, but you may not have to pay for them immediately. A lender may be willing to roll those into the costs of the loan.

Home Equity Loan

This home equity loan locks you into a fixed interest rate during the loan period. This may last for as long as 30 years, or as short as 5 years. At least you have a steady amount to cover to include into your monthly budget. You just borrow a set amount of money to cover your home repairs, and then you pay then back with fixed monthly installments.

FHA Title I Loan

This FHA Title I Loan is insured by the federal government, and it’s an option when you don’t have equity in your home. As a homeowner, you can borrow an amount that can reach $25,000 although there may be some limitations for your use of the money. In many cases, the loan is specifically meant to pay for home improvements that enhance the functionality or livability of the home. This means you may be able to use the money to fix or replace a leaking roof or build a new bedroom for a growing family. But you may not be able to use it to build a home gym or a swimming pool.

Section 504 Home Repair Program

It’s possible for you to qualify for a Section 504 single Family Housing Repair Loan if your family has a low annual income and you can’t get a loan from any other source. But you may want to check first if you also qualify for a home repair grant instead of a loan.

The conditions of the loan can vary depending on the location. In general, you can qualify if your family income is less than 50% of your area’s median income. So for example, in LA the current median income is $54,510 so your family may qualify with an annual income of less than $27,255.

Personal Loan

If all else fails, a personal loan can still be an option. If you have a good credit score, you can apply to a bank or other similar financial institutions and apply for a personal loan. You should shop around and find a bank that offers low interest rates while it makes the funds available to you as soon as possible.

Just remember, in many cases, home repairs can’t wait. If your roof is leaking, have it repaired now using any of these loans for home repairs before the problem gets worse.

Another alternative to paying for home repairs via taking out a loan is to be proactive and sign up for a home warranty protection plan.

Get Your Home Armor Protection Plan Today!

Never Worry About Home Repairs Again!