Home Improvement Finance

In these tough economic times when it is often difficult to sell a home or to find financing for a new one, many homeowners are taking a second look at their existing homes with an eye to renovations and home improvements. Add to this some very attractive federal energy tax credits for items like new energy efficient windows and there are a number of good reasons to consider home improvement dealer financing options.

Taking some time to do some research online will provide the potential home improver with an idea of the various home improvement financing options available. These literally run the gamut all of the way from the customary dealer/contractor financing by new window installers to same as cash deferred payment options to construction/home equity loans. A number of well known national corporations and lending institutions have programs to suit nearly every potential home improver.

Let us take a look at a few real world examples of options available to finance home improvements. Starting out with a common home improvement, replacing windows, one of the larger dealers is a company named Gorell. Many of these dealers have arrangements with GE Money to offer a quite reasonable financing program. GE Money’s improvement financing program acts as a credit card, giving the consumer a line of credit up to $25,000. If qualified, this credit can be used for several purchases and is not only limited to the initial replacement issues. There is very little paperwork required and financing home improvements can be accomplished with genuinely low monthly payments.

For those whose credit scores may be on the low side, there are still options available. Again, the Gorell group has dealers who have teamed up with EnerBank USA to offer a home improvement dealer financing program known as “Window Money.” There are several promotional opportunities available including deferred payment choices. EnerBank is known for providing financing for those with lower credit scores than most large banks are willing to risk.

Another well-known financial lending firm is AmeriFirst Home Improvement Finance Company and AmeriFirst offers a whole smorgasbord of ways to finance home improvements. Just a few of their many offerings include interest-only loans, cash-back refinancing, construction and rehab loans and good old-fashioned mortgages and second mortgages. AmeriFirst is willing to work with homeowners who are dealing with credit problems, something that a lot of banks simply will not do today. They also work with contactors to help them offer financial resources as a way to increase their customers’ options and opportunities. AmeriFirst is based in the Midwest but has a strong network of mortgage advisors and dealers available for financial services consulting.

A specific type of loan that is available for making improvements to existing properties are called 203(k) Rehabilitation loans. They can be used from everything to upgrading a bath or kitchen, adding a new room addition, or even reconstructing a house that cannot be currently legally inhabited. The requirements for a 203(k) rehabilitation loan even provide for a tear-down as long as the new dwelling is constructed on a portion of the existing foundation. Qualified owners can borrow over 95% of the appraised value based upon the value of the completed rehabilitation or repair project.

Finally an option offered by AmerFirst and other lenders a home equity loans and second mortgages. Those who have been in their homes for several years or have paid down the principal balance to secure sufficient equity can use this as a way to finance major home improvements. Equity loans is the term now commonly used to refer to a second mortgage. The general rule of thumb is that the loan is based on a specific payment amount; say the cost of adding on a family room. The qualifying factors include the home’s value, and the amount still owed on the original mortgage. An interest percentage is calculated and added on top of the amount needed for the improvements. All lending institutions have a number of qualified financial professionals on hand to assist in the process.