Getting a Home Improvement Loan: What Your Bank Needs

The popularity of stores like Home Depot and Lowe's show how many homeowners are jumping on the home improvement bandwagon. Maybe you're thinking of redoing part of your house as well. Perhaps you want the kitchen of your dreams or an extra bathroom. You know you'll have to take out a loan to finance the project, but if you're just in the beginning stages of the planning, you may not know exactly how to go about it. Whether you're refinancing or taking out a home-equity loan, here's some information on what your bank needs:

As with any loan, your bank will want to review your financial history before approving you for a home-equity loan. While different banks will have different loan criteria, there are a few things you can expect each institution to require:

-Your address and how long you've lived there
-Your employment history and current employer
-Your annual income and assets
-Your total debt and monthly obligations

For home-equity loans, the bank will also need information on your house such as its age and current property value. Save time by bringing the current tax assessment for your property with you. For smaller loans (usually $2000 or less), this may be enough information to indicate the home's market value to the bank's satisfaction. However, for larger loans, banks will require professional appraisals. Home appraisals typically cost $200-$300.

Above, I mentioned that banks want to know your total debt and monthly obligations. Specifically, they want to know your debt-to-income ratio. If your debt is greater than 30%-40% of your monthly income, the bank may be unwilling to offer a loan out of fear that you will not be able to make payments.

To further protect their assets, the bank will require a copy of your credit history to make sure you're not a bad risk. A few months before you decide to take out a home-equity loan, it's a good idea to get a copy of your credit report and check it for errors. Contact the credit bureau and correct any errors ahead of time. This will save time later and help you get the right loan for your home improvement needs.

TC Thorn writes for http://www.luxuryhousingtrends.com

This article may be reprinted so long as a link back to the site is included.

---

A Guide to Getting a Home Improvement Loan

If you've got a few things around the house that... Read More

Home Loans and Mortgages ? Time to Consolidate Loans?

Home equity loans and lines of credit are useful tools... Read More

What is a Capped Mortgage?

A capped mortgage is a variable rate mortgage with a... Read More

Keep Your Eye Focused on Treasury Bond Rates To Adjust Your Current Mortgage Rates

Mortgage rates typically are based off the current rates of... Read More

The Right Home Loan - Floating or Fixed Rate Loan

Choosing a home loan has never been tougher. Yes, with... Read More

First Time Home Buyer Loans Made Easy

When it comes to firsttime home buyer loans, a little... Read More

Home Loans: What You Should Know!

Finding home loans can be a daunting task, whether you're... Read More

What is a Home Equity Loan?

A home equity loan is a loan that is guaranteed... Read More

Guide to Mortgage Terms

Listed below is a guide to mortgage terms. It is... Read More

Why Choose a Home Owner Loan?

Most people choose a home owner loan as it can... Read More

Mortgage Refinancing - Does Size Matter After All?

Hopefully your ego has never had to experience the words,... Read More

Seniors Can Use a Reverse Mortgage to Fund Annuities, Investments, and Insurance Policies

For many seniors in or entering retirement, the prospect of... Read More

What Exactly Is A Reverse Mortgage And How Does It Work?

A reverse mortgage is a certain loan that allows the... Read More

Secured Loans ? Making the Most of Your Home as Collateral

My visit to the lender was interrupted with my wife... Read More

Self Employed Mortgage Loans - A Survival Guide

When you're self employed you have numerous advantages. As you... Read More

A Guide to the Best Remortgage Deals

Finding the best remortgage deals isn't always easy, especially with... Read More

Home Loans and Mortgages ? The Selection Can Be Bewildering

For years, when someone wanted to purchase or refinance a... Read More

Home Equity Loan ? When Does Refinancing Make Sense?

For the last two years, interest rates have been much... Read More

Refinancing Your Home Mortgage Loan

You're considering refinancing your home mortgage loan to save money.... Read More

First-time House Buyers: to Buy or Not to Buy; that is the Question

Buying your first house is always a difficult time. There... Read More

Securing the Best International Mortgage for Your Home in Spain

Are you one of a growing number of people planning... Read More

Home Equity Loans - 5 Useful Application Tips

Obtaining a home equity loan does not have to be... Read More

Reverse Mortgages: When Is One Right For You?

How do you know if a reverse mortgage is right... Read More

High Risk Home Mortgage Lenders Online

Online high risk home mortgage lenders specialize in offering loans... Read More

The Truth behind Pension Mortgages

A pension mortgage may seem lucrative at the first sight.... Read More

A Home Equity Loan - What You Should Know?

Asking yourself, "Is a home equity loan right for me?"... Read More

Why Choose a Home Improvement Loan?

Many people choose to take out home improvement loans so... Read More

Mortgage Loan Information - Know The Basics When You Refinance or Purchase a Home

If you are currently looking for a new home, chances... Read More

Bad Credit Home Financing - Get The Mortgage Loan You Want Even With Poor Credit

Having poor credit alone cannot hold you back from getting... Read More

Home Equity Line of Credit - Finding The Best Home Equity Lender

Borrowing against the value of your home using a revolving... Read More

Online Mortgage Brokers - What You Might Not Know About Home Loans & The Internet

You may think that applying online for a mortgage is... Read More

Flexible Mortgage Tips

Outlined below are some useful flexible mortgage tips. The most... Read More

Refinance Your Home Mortgage Online

The largest financial obligation most people ever take on couldn't... Read More