Consumers Digest

What is the max home improvement loan one can take? Or is a construction loan better. PLZ answer both ?'s?

Home is paid off but needs upgrades and major repairs.

Public Comments

1. then you should be able to borrow the value of the home.which loan is better?depends on the lender,you need to do your homework and ASK questions.
2. I would suggest doing a line of credit, which can be used as you need it to make improvements. You only pay for what you use. Currently rates the are as low as 4% on these lines. You can borrow up to 90% of your property value. After you are done with the improvements you can convert the Line of Credit into a fixed mortage. This is a very cost effective way to do things. Forget the construction loan, that is not your best option,
3. Do you think the improvements are going to cost more than what the house is worth right now? I would think you just need a home equity loan. I don't think a construction loan is applicable in this situation but I could be mistaken. It's hard to say what the max would be because of the current economic situation causing lenders to tighten their rules. Try going to bankrate.com and looking at lenders in your area for home equity loans. Pick 2 or 3 with the best rates then contact them and tell them what you need to do. Each lender will have its own set of criteria and they can answer questions for you without running a credit check. Good luck.