Are you familiar with no equity home loan? Why does homeowner need to know about this? If you plan to live happily ever after in your current home, you definitely should know about this kind of loan. This loan is aimed for home improvement. A home is more than just a building, it is sanctuary for you and your family. However, sometimes your home can be a bit boring. At this point, you probably starts to think about remodeling or renovating your home. But, what if your budget is limited? This is where the no equity home loan works.
What is the no equity home loan for?
Ok, so you want to remodel or renovate your house, but then which part that you can remodel or renovate by using this loan? Apparently, the particular loan is available for anything that deals with home repairments including new appliances, furnish house, and even install a pool. Homeowners may also build an additional room, update the bathroom, and so forth.
Types of No Equity Home Loan
The loan has several types. What are they?
The first type is known as the personal loans. What is like? The loan is aimed for home reparation without even depleting the equity of your home. It is a smart financial way to improve the quality of your property. In case someday you might want to put it on sale, you can gain a lot more profits compare to the loan.
The second type is the one that offered by FHA special for home improvement. The good side of this type of loan is that you can ask for a loan even when you have poor credit. This particular type provides around %25.000 funds. Additionally, the rate is fixed. Nevertheless, this type of loan requires contractor’s licensed so that all job can be done. But, you need to remember that this loan limits the home improvements.
The third type is no equity home improvement loan. The loan is based on credit scores approval. It is also required debt to income and it does not concern with the value of your property or home. This loan enables the lenders to get funds more than 25% from its market value.
The fourth one is known as construction Loans. If you want to remodel your house, this loan is the perfect choice. Homeowners who are planning to have such an extensive remodeling usually choose this loan since they can use the funds for various improvements. Why? This particular loan is given based on the projects.
So, overall, no equity home loan is recommended for homeowners who are in the need of remodeling or repairing their home.