You have no equity and you need to be approved for a home improvement loan to fix something or perhaps remodel your kitchen and you are not sure what to do. Well, the answer is easy if you know where to look. You could try going to a bank or to a big lending institution but your chances are slim in in those venues because you have no equity in your home. With no reasonable equity being a new home owner, a new loan for home improvement may be not easy to get.
So where should you look?
Look for a small company that specializes in home equity loans with no equity.
A no equity home loan is mainly another loan (following your mortgage loan) that you can take against your home and pay it over time. There are companies out there that will let you borrow say $20,000 so you can remodel your kitchen while affording you the opportunity to pay it back over a determined amount of time that you choose and that you can afford. Could be a 5 year, 10 year or even a 20-year loan. FHA home equity loans are in most cases also tax deductible.
For that reason alone, a no equity loan for your home improvement can be way more beneficial than other types of loans. Here some more features of these equity loans:
- Competitive interest rates – An equity loan with lower rates can reduce your monthly payments considerably. Again, companies that specialize in these types of loans can get you a better rate.
- Get approved when banks won’t approve you – This one is simple. Get the money that you need for your project when you otherwise couldn’t
- Get approved with less than perfect credit – Get a no or low equity loan even if your credit score is low. These smaller companies that want your business are more willing to take a risk than larger banks are.