People suffer from a bad credit history because of various reasons; the most likely reasons are mismanagement of their finances and failed to pay back their loan obligation. But there are people with bad credit history due to sudden illness and loss of their jobs.
Can you still get a home improvement loan if you have bad credit? The most common reason why people want such a loan is to increase the market value of their house. Other reason is to repair the house; perhaps the paints on the wall are crumbling down; the kitchen ventilation is not working properly; etc. All these can also be considered as home improvements as the value of your house would likely be raised after such improvements.
The main reason why bad credit home improvement loans are possible is the fact that you’re actually borrowing money from your home equity. In other words, you’re putting up your home as collateral; if you can’t pay back your loan, you might lose your home. So, please keep that in mind as there is a risk of losing your house here.
There are people who use home improvement loan because they are planning to sell their houses; so they treat such loan as an investment; they get the funds to finance the costs of fix up and remodelling of the entire house so that the house’s value is raised considerably.
To increase your chances of getting approval for your bad credit home improvement loans, it’s advisable that you go to your current mortgage lending bank first. The lender knows you and will have firsthand knowledge of how well you’ve been paying your mortgage bills. They will also have easier access to your personal mortgage that you have on the house right now.
However, you shouldn’t just take whatever your lender or bank has to offer. Listen and take notes of their suggestions, then talk to other lenders and do some comparisons. You want to compare everything from the interest rates to all the closing fees they will charge you. Different lenders offer different rates and charge different fees. So, make sure you do your due diligence in order to get a great deal.
Another tip you should remember when applying for bad credit home improvement loans is to have a detailed plan ready; the plan should include all the calculated and estimated costs for the improvements and repairs you want to carry out. This can help to increase your chances to get the loans as lenders would like to know what you’re intending to use the loans for.