How You Can Afford A Home Improvement When You Have No Equity

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by J Miller

The housing bubble has burst and because of the crash in home values across the nation there are a lot of people who are now living in homes that have not built up any added value over the past several years. This has put stress on people who were hoping to use the increased financial value of their homes to perform some much needed home improvements.

In a rising housing market you can buy a house value one year and in the next year the value of the home will actually grow by a few percentage points from one year to the next. So if you bought a home for $180,000 five years ago it might actually be worth $190,000 today with normal economic growth. You would then be able to borrow money against that added value from a lending institution and use that cash to upgrade your home.

Today many people don't have that added home value which is known as "equity." Most housing prices have actually dropped in the past year or so, which means a lot of people are now living in houses that are now worth less than what they originally paid. When you owe more cash on a house than what it is worth then you are said to be "underwater" with your mortgage payments.

If you're searching for a big home improvement loan then you may want to think about applying for an FHA home improvement loan from an eligible loan partner. There are lots of sellers of these kinds of loans, they offer a competitive interest rate and you may be eligible to pay it off over a generous 15 years. Just about any one who owns a home can apply for an FHA loan and eligibility is less severe than most traditional bank loans. You do not have to have equity in your home to apply for an FHA Title I home improvement loan.

Another good way to keep the high price of a home upgrade project down is to do at least some of the labor yourself. There are lots of easy DIY home improvement jobs most people can do around their houses with just a little bit of knowledge and some elbow grease. For many home improvement projects the highest expense often comes from the amount of manual work involved, so by doing some of that work yourself, you can really shrink the total cost of the overall project.

Most manageable house repairs can become large headaches if they are allowed to go unaddressed for too long. If you have a important home repair that needs to be done, don't let a lack of equity prevent you from obtaining the cash you need to make the improvements. And, as expected, large home improvements always end up costing more than the little ones.

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