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Whether it’s because you want to purchase a new residence and upgrade prior to moving in, are improving your existing house, with a new kitchen, bath, roof, addition or many other home improvements, you may be in need of extra funds to complete the home improvements you have in mind.
Project home improvement loans are, as the title states, are offered by various banks, credit unions and finance companies to consumers who intend to use that money to finance a renovation, addition, or restoration that they otherwise might not have the funds to pay for it currently.
There are three types of home improvement loans: installment loans and revolving loans, and construction loans. With an installment loan, borrowers are pre-approved for the amount of the loan with the funds being held in escrow at the beginning of the project and then the lender will pay the contractor upon completion, then the borrower will make set monthly payments until it is paid off in full. In a revolving loan, the borrowers take out the amount they need as they need it, up to the credit limit, and can borrow more later if necessary. With a construction loan borrowers are pre-approved for the amount of the loan and the funds are held in escrow at the beginning of the project, then the lender will pay the contractor in increments as the job progresses, when complete the borrower will make set monthly payments until it is paid off in full.
Also, loans can be either secured or unsecured. In a secured loan, borrowers are required to pledge their homes as collateral, whereas unsecured loans don’t. To meet the criteria for one of these loans, you should expect the lender to evaluate your credit score as part of the determination. The best credit scores will get better rates, however there are many other determining factors. You can even get a Renaissance Restorations, Inc., credit card to fund home renovations.