Best Home Improvement Loans For First Time Home Buyers

Government Home Improvement Grants For Bad Credit Or 1st Time Buyer

Are there cheap ways to improve the value of your home when you are tight on cash or have bad credit? For many home owners looking to finance a swimming pool, repair a leaking roof, add a new carpet, or other maintenance and home improvement projects to your house, there are actually several 100% home improvement loan options available to you whether its for much needed repairs, winterizing your home for cold weather etc. On the other hand, many first time home buyers are picking up cheap foreclosed houses from banks but these usually need some rehabilitation works before they are good to move in. How about adding the cost for foreclosure home improvement into your mortgage so that you do not have to pay for renovations up front? These can add up quickly to between $10,000 and $25,000 depending on the actual conditions and how large your new home is.

So here are a few options that home buyers can use if you want to combine a home improvement loan and normal mortgage such as the HUD 203K, Fannie Mae HomeStyle Remodeler, or private lenders. Alternatively, you can try a title loan borrowed against the value of your car. It can be cheaper depending on your situation.

HUD/FHA Section 203(k) Home Rehabilitation And Home Improvement Loans

The Section 203(k) FHA insured loans for home rehabilitation and home improvement is the most popular among 1st time home buyers because they are usually offered together as a package deal. You can easily get FHA 203(k) loans to cover the purchase costs of a home as well as the costs for home renovation. Like many government assistance programs, just note that there are several restrictions, so you need to check with your home renovation loan specialist on the list of allowed rehabilitation before you proceed. For example, new homes are usually no applicable and the pre-owned house must be at least 1 year old, total cost of approved renovations must be more than $5000, etc.

To illustrate, lets say you want to buy this home for $100,000 and the estimated improvements will cost another $20,000. Your home renovation loan lender can help you apply for a Section 203(k) mortgage up to the lower of the following two figures:

1) The total cost of your home, renovations and the first 6 months of mortgage payments, or
2) The total value of your home post renovation plus 10%.

When we buy a house of our own, we naturally like to furnish it comfortably to our expectations. That is why home improvement loans such as the HUD Section 203(k) mortgage makes it easy for many home buyers to get 100% financing for any home repairs and improvements.

Fannie Mae HomeStyle Remodeler

Alternatively, you can apply for the Fannie Mae’s Homestyle Remodeler to combine your mortgage and home remodeling loan into a single loan. So why should you choose this Fannie Mae’s home improvement loan? The reason is because for bigger homes or when you want a luxury home decor, this homestyle remodeler loan has a higher maximum loan amount compared to the 203(k) loan. There are some restrictions as well such as you are usually not allowed to add new structures to your property although renovating existing structures are approved.

Private Lender Options

In the event that the federal government home improvement loans are not suitable for you, there are still private lenders such as Wells Fargo, Chase Bank, Bank of America or the smaller credit unions. You can negotiate for adding a home improvement loan to your private mortgage loan through any of these lenders and banks if they offer better terms and conditions compared to those from HUD and Fannie Mae.

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