Finding the Best Rate for Your Home Improvement Loan

If it is time to make some improvements on your home, you may be considering taking out a loan to do this, and will need to shop around to make sure you get the best possible rate on this loan. When you are thinking about all of the projects you want to complete, you will probably list all of the items and expenses associated with each. For instance, if you are planning to paint the outside of your home, you will need to figure in the cost of renting or purchasing a pressure washer. You may need to purchase primer or sealer to apply to your home, and will need to add this to your list. You must then determine if you are going to use a paint sprayer, or simply apply the paint with rollers and brushes, and figure the cost associated with these. And then, you must consider how much paint will be required not only for the main part of the house, but also for the trim, door, mailbox, and whatever else you will be painting.

If your projects will also include landscaping your yard, you will budget for the costs of the plants, soil, mulch, fertilizer, garden tools, hoses, and possibly even new sprinkler heads if these will be necessary. If you are planning to install new cabinetry, you will go through a similar planning and budgeting process, and so on. Once you have completed the list of supplies for your projects, you will begin shopping around for the best prices. When you are considering such large projects, it is important to be sure you are getting the biggest bargains available so you can recognize as much savings as possible. With this much effort into planning the home improvement projects and finding savings on the materials, why wouldn’t you shop around to find the best rate on your home improvement loan as well?

To find the best home improvement loan rate, check with a variety of lenders, and find out about the programs they have available. You will want to check with your own bank or credit union to find out about their loan programs. You will also want to check with your current mortgage lender to see if they are able to offer competitive rates on the loan you need. Ask around to see if you can get recommendations from your friends or family. You might be surprised to find that some of them have recently checked into loan information, and can offer insight that would be helpful. And, be sure to check with lenders online.

Something else to keep in mind is that lenders may focus on the credit scores provided by different credit reporting agencies. A quick glance at your credit report will show that you may have a much higher score with one of the agencies than another. Finding a lender that accepts your highest score may make a tremendous difference in the interest rate you are able to obtain. A lower interest rate can potentially save you thousands of dollars by the time your home improvement loan is repaid. Take the time to research not only the lenders, but your own credit history as well.

When comparing the rates offered on home improvement loans, be sure to compare estimates that you obtained from each lender on the same day. Because the interest rates will fluctuate daily, comparing the rate one lender offers today with the rates offered by another lender tomorrow will not give you an accurate comparison. Also, find out what fees and closing costs can be expected from each lender, and keep these prices in mind when deciding which lender is able to offer the best program to fit your needs.

Another important consideration in choosing your home improvement lender is the type of loan they are able to offer you. You will find that the lowest interest rates are often attached to adjustable rate loans. While this lower rate can be very enticing, keep in mind that this attractive rate has the potential to climb much higher over the life of the loan. A loan with a fixed rate may charge higher interest initially, but you can rest assured that the rate will not change. Find out as much information about the adjustable rate loan as possible. This low rate may be locked in for a certain period at the beginning of the loan, and will have a limit how much and how often the rate can increase. This can make the difference between choosing the adjustable loan, and determining that the higher, fixed rate might be a better choice for you.

As with any major financial decision, be sure to obtain as much information as possible before selecting your home improvement loan. A little research can help you find the best interest rate, and save you thousands of dollars as you transform your home into the home of your dreams.