Home Improvement Loans in Houston

If you live in or own a home in Houston, Texas and need a home improvement loan, you are in the right spot. After this easy read, you'll be ready to apply for a home improvement loan. In addition, you'll be well-educated on your options and the going interest rates. Whether you have just purchased a new home or have owned a home for decades, it may need some repairs or improvements. Home improvement loans can be used for just about any home improvements or repairs ranging between $1,000 to $100,000. Investing in your home can increase home value and make it more desirable. This can help justify the additional cost of using a home improvement loan. Year after year, experts are reporting increasing home values in Houston, thus giving homeowners even more reasons to make home improvements.

What kind of loan is best for home improvements?

While one type of loan may be best for one homeowner, another type may be best for another homeowner. While it would be easier if there was a universal home improvement loan option that was best for everyone, there is not. The type of home improvement loan that is best for you usually depends on your finances. If you have 20% or more equity in your home, you may want to consider a home equity loan, home equity line of credit, or cash-out refinance. If you do not have equity in your home you should use a personal loan for home improvements, also known as a home improvement loan. Regardless of the type of loan you choose, you need to make sure you can cover the monthly payment. Each type of home improvement loan has its own set of pros and cons. A little later on we will compare the top 5 home improvement loan options for 2021.

Which is better: home equity loan or home improvement loan?

For some homeowners, a home equity loan may work better and for others, a home improvement personal loan may work better. If you are trying to decide which option is best for you, you can start by asking yourself a few questions. Do you have equity in your home? Are you willing to borrow against your home in exchange for a reduced interest rate and longer term? If the answer to both of these questions is yes then a home equity loan may be better for you. However, if you do not have equity in your home or do not want to use your home as collateral, a personal loan may be better. In addition, if you have credit challenges a personal loan may be easier to qualify for. The consequences of defaulting on a home equity loan can be more severe than the consequences of defaulting on a home improvement loan. If you default on a home equity loan you may lose your home.

Are Home Improvement Loans a Good Idea?

In most cases, home improvement loans are a good idea. There are only a few reasons why we would recommend against them. If you cannot cover the monthly payment, a home improvement loan is probably not a good idea. In addition, if you have a high debt-to-income ratio, you may want to pay off other debt before using a home improvement loan.

How does a home improvement loan work?

Most lenders fund home improvement loans as a lump sum of cash that can be repaid over time with interest. If your home improvement loan is issued as a lump sum you will most likely pay interest on the full loan amount. We recommend getting an accurate estimate and applying for just the right loan amount. This can help homeowners avoid paying extra interest.

Our Top 5 Home Improvement Loan Options for 2021

Houston homeowners should use one of our top 5 home improvement loan options. Once you learn a little more about each option, it should be easy to narrow down the option that is best for you. Although the cheapest way to pay for home improvements is paying cash, it may not be an option for all of us. In addition, some homeowners have the cash but would rather save it for an emergency. Home improvement loans can offer low interest rates and flexible terms, thus making financing an attractive option. Borrowing money for home improvements may cost more over time but it's likely that homeowners will recoup their money when it's time to sell. Here are our top 5 home improvement loan options for 2021...

Home Improvement Loans
Home improvement loans are the number one choice for many homeowners in Houston. Home improvement loans are unsecured personal loans. Since home improvement loans are unsecured, you won't need collateral to qualify. To qualify for a home improvement loan all you need is a decent credit score, reasonable debt-to-income ratio, and consistent income. Most banks, credit unions, and online lenders offer home improvement loans. If you own a home in Houston and want a home improvement loan you should visit Acorn Finance. Acorn Finance has reputable lending partners that can help all credit types obtain home improvement loans. Homeowners can receive multiple personalized home improvement loan offers within minutes without affecting their credit score. Borrowers that use online lenders have more options available. This forces online lenders to be more competitive. Online lenders typically have faster application and approval processes. In some cases, online lenders can fund home improvement loans within one business day. Homeowners can obtain home improvement loans up to $100,000 with terms up to 12 years and rates starting at just 6.99% at Acorn Finance.

Home Equity Loans
Home equity loans may have longer terms and lower interest rates than home improvement loans. Home equity loans are secured with collateral making them riskier for the borrower. Similar to a home improvement loan, home equity loans are usually issued as a lump sum that is repaid over time with interest. Home equity loans can have more complicated and longer processes. Most lenders offer repayment terms between 5 to 30 years and allow homeowners to borrow 80% to 85% of home equity. This means you'll most likely need to have at least 20% equity in your home to qualify. If you default in a home equity loan you can risk losing your home. Homeowners may be able to qualify for a home equity loan with an interest rate as low as 3.25%.

Home Equity Line of Credit (HELOC)
A home equity line of credit is similar to a home equity loan in the sense that you'll need equity in your home to qualify. A home equity line of credit is also similar to a credit card in the sense that you'll have access to a certain amount of money. However, you should only pay interest on the amount of money you use. For example, if you have a $200,000 HELOC and you only use $50,000, you should only pay interest on $50,000. Most lenders loan between 75% to 90% of the available equity in your home. Homeowners can obtain HELOC loans with interest rates as low as 2.49%.

Cash-Out Refinance
Homeowners in Houston can use a cash-out refinance to finance home improvements. Compared to other options cash-out refinances can be more difficult. However, if you qualify for a cash-out refinance it may provide the money you need for home improvements while lowering your mortgage payment. If interest rates are lower than when you took out your current mortgage, you can lower your interest rate and monthly mortgage payment. Similar to HELOC's and home equity loans, cash-out refinances require homeowners to have a certain amount of equity in their home. If you use a cash-out refinance you will refinance your mortgage and borrow money at the same time. When you complete your refinance, you will receive a check. The balance of your new mortgage will be higher than your old one. The difference between the old mortgage and the new mortgage balance should be the amount of the check you received, plus any closing costs in the loan. Homeowners will most likely have to pay closing costs on the entire loan amount.

Credit Cards
In most cases, credit cards are better for minor home improvements or repairs. If you can pay the balance off within a few months, you may be able to find a credit card with a promotional period. Some credit card companies may offer an introductory 0% interest period. However, if you are unable to find or unable to qualify for a credit card with a promotional period you should seriously consider other options. Credit cards typically have much higher interest rates than other options.

Conclusion

In conclusion, home improvement loans are a top choice for Houston residents. Homeowners can secure personal loans up to $100,000 within minutes at Acorn Finance. In addition, home improvement loans can be used for a primary residence or rental property. In order to qualify for a home improvement loan, you should have a minimum credit score of 620 or higher. Acorn Finance has lending partners that can help all credit types secure home improvement loans.

Get pre-qualified for a home improvement loan in minutes. . . apply online today!

1. Complete and submit a short loan application online
2. Receive multiple pre-qualified offers
3. Get connected with lenders to obtain your pre-qualified loan