Recently in Home Improvement Loans Category

Seniors face aging issues with their houses and condos.  They must make decisions about what needs to be remodeled, and how to pay for it -- and for seniors that is usually more complicated than for people with full time jobs.  Reverse mortgages have become available as one tool.  But local and state programs also make loans available through affordable housing programs to help seniors remodel for energy efficiency, weatherization and major repairs such as roofing, plumbing and window replacement.

According to the AARP, the lowest cost reverse mortgages are public loans.

The least expensive reverse mortgages are the ones offered by state or local governments. But these "public sector" loans generally can be used for only a specific purpose, like home repairs. Many are only available to persons with low to moderate incomes. But the low cost can make these loans very attractive.

Energy Efficiency and Weatherization

Remodeling projects or home maintenance projects of significant sizes, such as major plumbing upgrades, or energy efficient window replacement or a new roof, can warrant using equity in your home.   These major home renovations can improve the quality of life for a senior at the same time they reduce monthly energy bills and improve the value of the home. 

Deferred Payment Loans (DPLs)

Many local and some state government agencies offer "deferred payment loans" (DPLs) for repairing or improving your home. This type of reverse mortgage gives you a one-time, lump sum advance. No repayment is required for as long as you live in your home.

Property Tax Deferral (PTD)

Some state and local government agencies offer "property tax deferral" (PTD) loans. This type of public sector reverse mortgage generally provides annual loan advances that can be used only to pay your property taxes. No repayment is required for as long as you live in your home.

According to a 2007 AARP study, some type of PTD program is available in parts or all of the following states: Arizona, California, Colorado, Florida, Georgia, Idaho, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, North Dakota, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin, Wyoming, and the District of Columbia.

AARP does not endorse any reverse mortgage lender or product -- so do your homework and ask a trusted financal advisor for help in analyzing your situation and the reverse mortgages available to you.

Read more at AARP about Low-Cost Public Loans

Infill development is a new strategy intended to reduce municipal costs as well as environmental damage caused by rampant, uncontrolled urban sprawl into rural and wilderness areas.  In California, it is especially important because of our reputation for fires, floods and droughts!  The escalating population is being felt keenly in Southern California in particular -- but also across the state as the global population escalates out of control, and as rural populations decrease and urban populations increase.

The following issues from an Infill Development strategy meeting illustrate the issues that are being researched, weighted and parsed ... and are the issues many cities around the country will be facing in the coming months or years.

A bi-partisan effort in California worked over 18 months  to develop housing infill issues on the ballot among a host of infrastructure measures that include these key concepts:

• that site eligibility be determined according to density thresholds appropriate to urban/suburban/rural jurisdictions;
• that developers be allowed to apply for the funding (in addition to local government entities);
• that a list of delineated housing-related infrastructure uses beyond water, sewer, and utilities be incorporated into the legislation (including brownfield clean-up, demolition, public transit linkages attributable to new housing);
• that a minimum affordability threshold of 15% be established (as there had been no affordability provision in the ballot language);
• that funding be allocated proportionally across the diverse regions of the state, that ownership and rental housing be eligible for funding,
• that there be a distinction between 'infill areas' and 'infill projects';
• that there be a series of ranking criteria created to guide the application selection process (including density, affordability, proximity to transit, and local support/leverage)

Funding is always at the heart of community issues, and infill development is no different.  Infill Development Set-Aside funds are being debated and distributed among public, nonprofit and private builders. 

Applicant Eligibility
With respect to the possibility of private housing developers applying for this set-aside funding,
some participants worried that the infrastructure grants could be 'give-aways' to housing projects that may well be feasible without this subsidy.  There was agreement that the funding should be awarded to those projects for whom the unusual infrastructure needs represent the primary impediment to development.

 
Parking Issues

As public transportation and transit corridor development is being encouraged by cities, there was considerable discussion for when costs associated with parking infrastructure should be included as an eligible use. Whereas one convenient rule of thumb that only replacement public parking be eligible, some developers expressed their concern that often times the amount of housing they are permitted to develop on a site is directly related to how much parking they can provide. Providing on-site parking presents substantial cost implications for which these developers see this infill set-aside funding as being appropriate.


Affordability

There is discussion about how best to encourage affordability beyond the minimum 15% threshold. For some non-profit developers, the mixed-income focus of the funding seems to deviate from the message of the PROP 1C campaign to assist low- and very-low income households; others supported the mixed-income approach saying that without this kind of public leverage market-rate developers are not tackling difficult sites that are otherwise located conveniently to jobs and transit.

One concept mentioned in meetings with legislators was to perhaps consider an 'affordability cap' whereby point for affordability under the ranking criteria would not accrue beyond, say, 40% of a project's total units. The thinking behind this was that developers interested in mixed-income housing scenarios may do tax-exempt bond deals electing to set aside 20% of the units at 50% AMI or 40% of the units up to 60% AMI. The 'cap' would not be intended to discourage 100% affordable infill projects from applying for the funding but such projects would not have a competitive advantage beyond a 40% set aside for tax credit affordability.


Prevailing Wage Requirements

While there was little doubt that the use of these infill set-aside funds would trigger prevailing wage requirements, of particular interest is that guidelines make clear that the funding is limited to the housing-related infrastructure component itself. As in the period following the implementation of the 2003 prevailing wage requirements, participants agreed that a challenge to the applicability of prevailing wage for an entire project will likely be forthcoming.

According to a recent Remodeling Activity Indicator conducted by the Harvard Joint Center for Housing Studies, homeowners spent $149.5 billion on remodeling during 2005, representing an increase of 4.3 percent over 2004 levels.

Most homeowners use some form of home improvement loan to finance large  home improvement projects, and they often find that figuring out how much money is needed for the remodeling or home improvement project, and how much they can reasonably borow can sometimes prove to be difficult.

Online resources can save time in researching what home improvement loans are available, from whom, and for what. There are many home loan calculators available on the internet. Resources such as HomeLoanCenter.com is one such websites that is easy to navigate with clear explanations of various options.

An online home improvement loan calculator helps homeowners try out different combinations of loan features and remodeling dreams to see what loan option best fits  their situation. In just a few minutes a homeowner can test how various options will translate in terms of repayment, the amount borrowed and potential tax savings available.

It's important for your peace of mind -- and monthly budget -- to be fully aware of all the costs, fees, terms and charges, as well as repayment schedule. involved in a home improvement loan.  

According to the National Consumer Law Center, home improvement scams can result in big problems for homeowners, so it is wise to be careful, check out resources carefully and deal with reputable financial institutions and vendors when it comes to choosing home improvement financing options.

Take the time to check out not only your design...but the people you will be working with.

For more information about online home improvement loan calculators check American Loan Search at http://www.americanloansearch.com/ or HomeLoanCenter.com.

Home improvements for a home that you just purchased -- new, old or in between -- are often required before a bank will close on a home loan.  However, it's also possible that additional problem crop up...and that there are less necessary, but highly desired improvements you will want to make upon moving into your newly purchased home.

HUD (US Housing and Urban Development) makes loans available through the HUD 203(k) program to help buyers purchase or refinance a property plus include in the loan the cost of making repairs and improvements.  The FHA insured 203(k) loan is provided through approved mortgage lenders nationwide. 

The downpayment on this type of home improvement loan is approximately 3% of the acquisition and repair costs of the property.

The HUD 203(k) home improvement loan goes through these steps:

1. A potential homebuyer executes a sales contract after doing a feasibility analysis of the property with their real estate agent. The contract should state that the buyer is seeking a 203(k) loan and that the contract is contingent on the home improvement loan based on additional required repairs by the FHA or lender.

2. The homeowner selects an FHA-approved 203(k) lender and prepares a detailed proposal showing hte scope of work and a detailed cost estimate on each repair or improvement.

3.  An appraisal is performed to determine the value of the property after renovation.

4. If the home improvement loan is closed, it will cover the purchase or refinance cost of the property, the remodeling costs and the allowable closing costs.  The home improvement loan will also include a contingency reserve of 10% to 20% of the total remodeling cost to cover any extra work needed.

5. At closing, the seller is paid and the remaining funds are put into escrow to pay for the repairs and home improvements during the rehabilitation project.

6. Mortgage payments and remodeling begin after the loan closes.  Up to six mortgage payments can be put into the cost of rehabilitation if the property will not be occupeid during construction.  Some restrictions apply.

7. Escrow funds are released to the contractor during construction through draw requests for completed work. Restrictions apply.

For a list of lenders who offer the 203(k) Rehabilitation Program, see the 203(k) Lenders List.

Before you undertake a home improvement loan, it is helpful to visit with other people -- friends, relatives or classmates in a home improvement class -- about the ins and outs of caring for a home, selecting a good contractor, and monitoring the work being done on the property.  Helpful advice and tips can be shared that cover your particular weather patterns and the kind of insulation or moisture control improvements that will make your home safe and snug for you and your family. 

Housing is the largest investment a family usually makes in their entire lifetime, and it pays to take your time, do your research, and select your home improvement loan and remodeling contractor carefully. 

Bankrate.com, provides free online bank finance rate information to consumers on more than 300 financial products, including mortgages, credit cards, new and used automobile loans, money market accounts, certificates of deposit, checking and ATM fees, home equity loans and online banking fees.

Objective personal finance stories help consumers learn about the risks and benefits of borrowing, and to make informed financial decisions on major financial decision facing them:  from purchasing their first home, to selecting a new car, to saving for retirement.

Bankrate
Web-based financial rate information
Bankrate.com

Tax Deductions
Tax deductibility of Home Equity Loans ain't a good reason to lose money :-)  For every dollar in your loan, you get back about 30 cents.  Not a good deal!  Tax deductions should be a secondary or tertiary benefit. Get some reliable  advice from a trusted tax professional before taking on a loan for tax deduction reasons.

Investment Funding
Stock market investing is high risk.  If your home is your nest egg, it's not wise to risk your family's nest and put your eggs into the stock market basket!

Deferring Debt
Using home equity to consolidate debt without making adjustments in lifestyle could create long term financial disaster or slide into further debt. If you consolidate credit card loans into a home equity loan, your house is on the line.

Wish Lists and Wishful Thinking
People who have lot of money typically haven't used much debt. They don't buy discretionary items like boats, wardrobes and trips with debt...especially their core housing!

... On The Other Hand
Home equity loans are good for home improvements that improve the value of the property, reduce operational costs...or cope with disasters such as floods or health problems.
 

Tax deductions for interest on home equity loans can make remodeling more affordable.  Here are a couple tips to ask your tax advisor about...and to figure into the cost of your next remodeling or home improvement projects.

The IRS allows you to  deduct the interest on up to $100,000 of home equity debt that is used for any purpose. That's on your home, not rental property.

HELOC deductions on second homes can qualify as a home mortgage interest if you use the home as a vacation home during the year.

So...consider remodeling projects that will reduce your energy and water costs.  With today's low interest rates, you might be able to get that weatherization or remodeling loan more easily than you could move to your dream home!