Mortgage Underwater? No Equity Home Improvement Loan Options
Posted on May 23, 2009 in the Mortgages category
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The housing bubble has burst and because of the downturn in housing values across the nation there are a lot of people who are now living in homes that have not built up any added value over the past several years. This has put a strain on people who were hoping to use the increased financial value of their homes to perform some much needed home upgrades.
In a normal active economy if you bought a home for $175,000 five years ago it might actually be worth $190,000 today. You would then be able to borrow money against that added value from a bank and use that money to upgrade your house. That’s the sign of a rising housing market: you may buy a home for a certain value one year and in the next year the value of the home would actually grow by a few percentage points.
Unfortunately many home prices have actually plummeted in the past year or so, which means a lot of people are now paying for houses that are now worth less than what they originally paid. This means they don’t have that extra home value which is known as “equity.” When you owe more money on a house than what it is valued at then you are said to be “underwater” with your mortgage.
Luckily you can still pay for home improvements even without having equity in your home. If you’re searching for a big home improvement loan then you may want to think about applying for a Title I home improvement loan from an eligible loan partner. You do not have to have equity in your home to get a Title I home improvement loan. Almost any one who owns a home can apply for an FHA loan and eligibility is less restrictive than most traditional bank loans.
Another great way to keep the high price of a home upgrade project down is to do at least some of the work yourself. There are lots of affordable do-it-yourself home improvement projects most people can do around their houses with just a little bit of know-how and some elbow grease. For many home improvement projects the largest expense often comes from the amount of manual labor involved, so by taking on some of that work yourself, you can really reduce the total cost of the overall project.
As you can guess, large home repairs always end up costing more than the little ones. Most small house repairs can become large headaches if they are allowed to go unaddressed for too long. If you have a serious house repair that needs to be done, don’t let a lack of equity prevent you from getting the money you need to make the improvements.
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24 Responses to “Mortgage Underwater? No Equity Home Improvement Loan Options”
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maybe we can make a link exhcange ? my blog is about loan and dofollow too, waiting your coming
There are plenty of responsible homeowners underwater that would like to refinance to a lower rate to save a couple hundred a month…
Only 3% of homes purchased in Atlanta Ga in 2006 have any kind of equity in there home.
-Brad
It will always save you a dime or two.
That’s why the bank crisis is aweful and the subprimes problem isn’t solved !
I work as an electrician and have on several occasions picked up side jobs in which the homeowner purchased the permit and matrials. I would do the work for around half of what an electrical contractor would charge.
This happens all the time in the construction business and is a great way to save on costs as most contractors make profits not only on the labor but charge a + percentage of material costs.
Now that being said we all know that everything works in cycles and at some point it will indeed turn the million dollar question is when!
Great Info and thanks for sharing!
All this mortgage stuff leaves my head in a muddle. Think I might need to meet someone face-to-face and have them explain it to me.