We use home improvement loans because they were created to help us make improvements on our homes that we couldn't otherwise afford. These loans can be used for things like adding an extra room, putting in a pool for our family in the summer, re-doing a kitchen or bathroom, or even replacing old carpet with new.



These are secured loans, which means that collateral is required which is usually based on the current equity in the home. In order to qualify for tax deductions, the improvements must be on the your primary residence, not on second homes, rental or vacation property.

Interest rates on your home improvement loan is usually lower than other secured loans since it is deemed as less risky and tends to improve the borrower's home. You must own your home or be financing your home to be qualified for a home improvement loan.

These loans are intended to help you the borrower add additional features to your home. The most popular home improvement is kitchen and bathroom remodeling, however other things such as installation of a new roof, adding a garage, or installing a pool are other frequently done improvements. The two most common types of home improvement loans available are; FHA Title I Home Improvement Loans and Traditional Home Improvement Loans

With both, you must either own or be in the process of buying the home since it's going to be used as collateral for the loan. When going for the Traditional loan you must have considerable equity in your home, usually upwards 20%. Your current equity in the home, as well as that created by the improvements, is your collateral. The lender then secures the loan taking a first or second lien.

Usually, home improvement loans are allocated for ten years or less, however some lenders may have programs that will allow for up to 15 years, depending on how much money is borrowed. Just like mortgages, interest paid on your loan is tax deductible. The Interest rate on home improvement loans is frequently considerably lower than personal loans because lenders consider those very risky.

An FHA Title I Loan is a U.S. Government program that helps you improve or rehabilitate your home much like a conventional home improvement loan.

This program is obtainable through various lenders, commonly banks. Some types of luxury improvements such as swimming pools and barbecue pits aren't allowed under this loan. With Title I loans, you aren't required to have any equity in your home for collateral. The loan period can be up to 20 years and you can have some past credit problems, providing you've shown recent acceptable credit.

On loan requests below $7,500, the lender will not take a lien on the home. The requirements are less severe than conventional home improvement loans and make it easier for a greater number of home owners to partake. As an added bonus, the interest paid is tax deductible.