For many of us, the most significant investment we have is our home. It is, therefore, crucial to maintaining the excellent state of this investment. As much as we may do everything right, some events are unforeseen, and this may damage our homes.
Home repair loans are usually the go-to option in such an instance. In that state of shock and despair, it is easy to be lost on what to do or from which lender to take a loan.
This financial guide will review some of the best house improvement loan lenders in the market currently and what are their terms and limits.
1. Avant: For People With a Low Credit Score
This is a Chicago-based company founded in 2012. The mission of this credit company is to provide credit services to individuals with bad credit ratings.
If you’ve been shopping around for home improvement loans, but your credit score has been an obstacle, you will want to have a look at this lender.
What happens when you approach them for a loan is they will assess your credit score first, and they are largely known for giving personal considerations rather than going by your FICO credit score. However, people with a 600-700 credit score most commonly qualify for loans with Avant.
You are not required to have a co-signer to qualify for a loan, but as for their maximum debt-to-income ratio, you will need to visit them personally since they do not disclose this online.
They, however, offer loan amounts on the lower side ranging from $2,000 to $35,000. If your home restoration requires anything more than that, then you might have to consider looking for another lender.
Their origination fee is up to 4.75% and repayment periods range between two to five years. Of the more than 600,000 loans that this company has offered since its establishment, discounts are not very common.
However, this can be inquired about at the time of application to know more about it. The customer service has been touted by many as being excellent, and this is a plus when you are in need.
2. Lightstream Home Repair Loans: For People In Need Of A Co-Signer
This lender was a brainchild of the SunTrust Bank in 2013. This is the best going option for anyone looking for a renovation loan facility that requires a co-signer as part of the process. If you are looking to outsource such a loan with your spouse, then LightStream is no doubt the best option for you.
The minimum FICO credit score you must have is 660. This is on the lower end and therefore, a favorable option if you have a bad credit score that hinders your access to funding from other institutions. The maximum debt-to-income ratio is not revealed, however, and you will have to visit their offices or give them a call to know what it is.
The loan amounts for this lender are stretched compared to the first lender above. With LightStream, you are eligible for loans ranging between $5,000 and $100,000.
The repayment period for these types of loans is set at between two and seven years. This offers much flexibility, especially if the home improvement is costly. The lender, however, has restrictions on how the loan can be utilized. You are only allowed to use the amount on the intended purpose of repairs and nothing else.
This could leave your hands tied, especially if you were hoping to use the leftover amount on something else like investing. An advantage, however, is that the lender has no origination fee on loans.
3. Bank Of America: For Big Budget Home Repairs
Bank of America is one of the longest-serving financial institutions in the country and with one of the largest networks.
Many ranking organizations have recognized their experience in the industry. The lender has an A+ ranking by the Better Business Bureau and additionally, J.D. Power gives it a four of five ratings with regards to customer satisfaction.
These ratings are a true justification of the resources that the company uses on making customer service exceptional. The Bank of America will qualify you for a loan with a FICO credit score of 620 and above. This can be seen as a deviation from the norm, especially with traditional banks.
The lender, however, has a maximum loan-to-value ratio of 100%. Additionally, the maximum debt-to-income ratio required is 55%. Under these terms, you will qualify for loans of up to $5 million. The total closing costs for this will vary however depending on the amount that you are taking. However, you are not going to spend anything more than $5,000 as the total costs.
Bank of America also does an excellent job in advising its customers on how to get out of debt, especially by giving loans based on income. This comes in handy, especially if you forecast any challenges on repaying loans later on.
Additionally, the Bank of America offers several mortgage types such as home equity, conventional, refinancing, VA, and FHA. This variety of options only serves to give you more alternatives to help you with your home improvement.
Always Brace Yourself For Disaster
Home repair loans serve as the only option for many people whenever there is damage to their homes. If you are in this category, the suggestions above will come in handy in helping you’re renovating your home in the shortest time possible.
However, it is essential that every American educates himself or herself on such types of financing instruments. Disaster gets to us when we least expect it, and it is always a good idea to be knowledgeable and not have to use the knowledge than to need it and not have it.
Home ownership is the pride of many Americans, and we do share this pride with them. Visit our blog daily for tips on how to improve your home using the various financing options available.