This year is shaping up to be “The Year of the Home Improvement” according to a number of sources both inside and outside of the home improvement and financial industries. While the last year and a half has been rough on the housing market as well as the home remodeling industry, the latest news shows that there might be some light at the end of the tunnel. Continue reading
Category Archives: Home Improvement Loan News
State and City Home Improvement Loans
When you’re applying for a home improvement loan or looking for some sort of a home improvement grant, don’t forget to check into your local government offices to see what they offer. Some small towns, cities and states offer specialized home improvement financing programs for their constituents and citizens. Continue reading
Knoxville Tennessee Forgivable Home Improvement Loans
If you live in Knoxville, Tennessee you might be eligible for a new forgivable home improvement loan initiative called the “My Front Yard” program. The offering gives qualified applicants up to $4,999 in home improvement loans that don’t have to be paid back if all the requirements are met. As we’ve noted before, Tennessee home improvements and loan applications are still on the rise while much of the country is seeing a decline in overall home improvement projects.
Tennessee’s population is exploding with more people moving into the state each year, raising home values and changing the financial housing map of the Volunteer State. Many residents of Tennessee have found themselves unable to move to new homes in the state because they can’t afford the rising mortgage costs brought on by the increased demand in housing and Tennessee real estate, so more and more Tennessee residents are improving their existing homes by taking out Tennessee home improvement loans and financing their home improvement costs.
The Best Home Improvement Loan May Not Be From A Bank
If you’re looking to finance a home improvement this year, there’s still a good chance that you’ll be able to get the loan you need as long as you don’t rely on the more traditional forms of home improvement loans. A traditional bank may not be your best choice for a home improvement loan any more. Continue reading
Home Improvements Loans Can Lead to Big Tax Deductions
You may be able to reduce your income taxes by taking out a loan to cover some much needed home improvements. Not all home improvements qualify for a tax deduction or tax credit, but in certain kinds of home improvements can decrease your taxes not just for the calendar year in which you finish the project, but also for years to come.
If you are required to perform a home improvement project or remodel part of your home to accommodate a medical condition then all or part of the cost of that project may serve as a tax deduction, which means you can reduce that amount from your taxable income for the year.
If, for example, someone in your home is suddenly confined to a wheelchair you may be able to deduct the amount it takes to install an elevator, lower kitchen cabinets or simply widen doorways in your home. Only certain home improvements related to medical costs apply, and you may need the written statement of a doctor or medical professional.
Likewise, the latest Stimulus Package has added tax credits to the 2009 and 2010 calendar years for certain energy saving home improvements including installing new energy efficient windows, doors, certain types of roofs, heating and air conditioning units. You can use up to 30% of the cost of any project as a tax credit, with a total of up to $1,500.
For example, installing $6,000 worth of solar panels on your home may qualify you for the maximum $1,500 tax credit at the end of the year. In addition, some states and even some utility companies offer additional money-saving and tax incentives for making your home more energy efficient.
Obviously, not all home improvements are eligible for a tax deduction. You should talk to an income tax professional or research some of the details surrounding home improvement tax deductions before you embark on any home upgrade or remodeling project.
You obviously may not be able to afford all of these projects without borrowing some money, but even certain home improvement loans can lower your taxes if the money is borrowed against the mortgage or equity in your home.
If you take out a home equity loan specifically for home improvements you can often use the interest you pay on the loan as a tax deduction. This is an option that is available with only certain types of home improvement loans. Each year the loan is open and you pay interest on the loan is another year you can deduct that interest amount from your taxable income in some cases.
Again, before you perform any home improvement or apply for any type of home improvement loan for tax reasons you should definitely speak with a qualified tax accountant to make sure your home improvement plans and loans are going to follow the letter of the law and be eligible for the greatest tax deductions or tax credits.
Bad News Is Good News for Home Improvement Loan Customers
If you’ve been paying attention to the news then you’ve heard a few conflicting reports about what is happening in the home improvement and financial markets. Here’s a quick explanation and analysis of what they could mean for you if you’re thinking about looking into a home improvement loan in the next several months:
International home improvement giant The Home Depot announced that they will be closing some of its stores and laying off nearly 7,000 employees. This sounds like awful news until you look a little further: the stores that The Home Depot will be closing consist of 34 Expo Design Center stores, 5 YardBIRDS stores, two Design Center stores and seven HD Bath stores. Those are all specialty stores with a lot of competition from local and smaller vendors. The Home Depot admitted that their Expo centers weren’t even doing well when the economy was good and there was a strong housing market. All the specialty stores affected will go into liquidation starting today, so there are some great home improvement deals to be found!
While the loss of jobs in the home improvement industry is never good, the recent cuts by The Home Depot show that their core business: discounted and affordable DIY home improvement supplies are still relatively strong because The Home Depot is not planning to cut any of those stores. This means that, essentially, home improvements are still a profitable and growing business and it means your Home Depot Credit Card can probably buy even more things for less money.
Our second bit of “bad news” comes from a report which says that housing sale prices dropped 9.3% to $198,600 in 2008. The prices haven’t been that low since 2004. This sounds like bad news until you hear that sales of existing homes actually rose 6.5% in December, which is traditionally a slow month for home sales anyway.
What does all this mean? It means that while existing homes did lose some of their value in 2008, the latest December numbers show that there is plenty of housing credit now available and it means that plenty of people are still borrowing money to buy homes. Because these are existing homes, a lot of that borrowed money will obviously be used to improve, customize or otherwise upgrade those homes. All in all it means that the credit market for small home improvement loans is clearly thawing and moving again.
Overall, if you bought your home before 2004 and if you’re looking for some good ways to stretch the money from a recent home improvement loan a little further, then this is all pretty good news for you. If you aren’t in one of those situations, then hang in there, the financial loan markets are opening up slowly. Your best bet for borrowing money to remodel or add on to your home may still lie in borrowing money from a local bank that hasn’t been negatively affected by some of the larger financial institution failings.
How the Federal Reserve Rate Affects Your Home Improvement Loan
If you’ve ever looked into getting any sort of loan for a mortgage or home improvement project you’ve probably heard talk about the Federal Reserve rate and how you may want to wait or move at a specific moment. But what does all this really mean? How can some big government institution like the Federal Reserve actually affect the rate of a home remodeling loan that you might apply for?
The Federal Reserve Board is government organization which does a number of important things, but one of the most high-profile monetary tasks of the Federal Reserve is to, in it’s words:
Open market operations–purchases and sales of U.S. Treasury and federal agency securities–are the Federal Reserve’s principal tool for implementing monetary policy… The federal funds rate is the interest rate at which depository institutions lend balances at the Federal Reserve to other depository institutions overnight.
Essentially, the Federal Reserve controls the rate at which banks and other lending institutions can borrow money themselves. Banks and other financial institutions that lend money for mortgages, home equity, and home improvement loans can then adjust the loans they sell up or down so that they can still make money.
Here’s an over-simplified example: if a bank can borrow $10,000 at 4.00% interest then they might be willing to offer you a $10,000 loan for a home remodel at 6.00% interest. As you repay the loan at 6.00% the bank would take the extra you paid, keep it as profit, and pay back the 4.00% on the loan. Essentially, the bank you borrowed money from is like a retail store with money: it “buys” money at 4.00% and it sells it to you at 6.00%.
This means that when the Federal Reserve rate is low you, as a home owning consumer, usually get better mortgage, home equity and home improvement loan rates. Of course, banks also have to worry about other things like loan default rates, paying employees, other market investments it may have and a variety of other things, so the rate at which they offer a home remodeling loan may fluctuate a fair bit from one day to the next.
Generally, when the Federal Reserve Board lowers rates most consumer loan rates, including home equity and home improvement loan rates, drop down a little bit. Likewise, when the Federal Reserve Board raises rates, loan rates go up.
Right now the Federal Reserve rate is at a historic low, which is just one of the many reasons why it’s a good time to get a home improvement loan.
It’s also important to note that the change in rates is not always immediate. Most experts in the financial industry say that it takes at least a week or two for banks to begin properly adjusting their rates and gauging market conditions before you may see the rates on things like mortgages and home improvement loans go up or down.
Obviously, your credit score, income and current home value will also play a part in whether or not you can get a good rate on a home improvement loan. The best way to find out more is to use a free home improvement loan calculator that can give you all the rates and details that apply to your specific financial circumstances.
Financing Your Home Improvements May Solve Economic Crisis
With the housing crisis not getting any better in the United States and the world economy in turmoil a lot of people are confused about exactly what they should be doing, especially with regard to paying for that home improvement they had planned. One of the ways to help fix the economy and begin raising values, however, is with a large push towards small home improvements, largely financed on a personal basis.
Let’s examine the problems we have now. Housing values were high for a long time, but the housing bubble burst and values began dropping, leaving a lot of people without extra equity in their home. This meant that home improvements and home improvement loans stalled, which put a strain on a lot of companies rely on providing materials and products for new and upgraded homes. While the banks were losing money on the defaulted mortgages, the home improvement companies and the production facilities that make products for homes also started failing due to the slowdown. Stock prices are tied to company performance, so they obviously went down, too. Everything was tied together and it all started with the housing market grinding to a standstill.
Now we’re in a credit crunch and banks still don’t want to loan large amounts of money for home sales, but small loans, like those used to pay for and finance small home improvement projects, are still readily available from a number of places. You can still go down to your local Lowe’s and get a credit card and you can always finance your small home improvements through a personal loan from a local bank. And since these small personal home loans are still available, it means you can play a major part in reviving the economy and helping the housing market grow again.
Here’s how this will work:
The one way you can make sure that your home sells for more money is to put more upgrades and improvements into it. While some people may have cash on hand or even some home equity to do this, a better way is to finance your home improvements with a small loan. By using a small loan to pay for your home improvement you are helping to move money around and you will likely be able to afford more upgrades initially.
These upgrades and home improvements will raise your home value, but they will also increase the need for home products and services, which will increase the need for manufacturing to increase and will increase the number of jobs that need to be created to keep those companies meeting the demand for their products. As the demand for home products and services continues to rise, more people will have better jobs and more money and will be able to put more money towards buying a home! Your home, with all of its improvements, will naturally be worth more money and can be sold for a higher price and will have more equity built up in it if you need to borrow again in the future.
Imagine if every homeowner in America started upgrading their homes with money borrowed from some of the many home improvement financing options available out there! We’d suddenly have thousands of jobs and lots of home equity and value being created!
In fact, President-Elect Barak Obama recently announced his plans to form a large public works package which will essentially do exactly this, but on a larger scale. Instead of focusing on home improvements, he’s focusing on city and state infrastructure improvements. The more improvements that are done the more jobs there will be and with more jobs comes a stronger economy.
By financing that home improvement you’re not only increasing the value of your own home, but potentially helping other people keep their jobs and actually helping the entire world’s economy to grow stronger.
When You Should Not Get a Home Improvement Loan
A lot of sites try to push the idea of getting a home improvement loan for just about any home improvement you have planned or any financial situation you’re in. Financial websites, banks and other lenders with a vested interest in making money off your loan. There are times, however, when financing a home improvement project is simply not a good idea. You need to make sure you don’t fall into one of these traps:
Best Time To Apply For A Home Improvement Loan
If you’ve been putting off that big home improvement project because you just didn’t have the money to pay for it then you may want to start considering your home improvement financing options now. There are several driving market forces which means it may be easier than ever for you to borrow money, especially when it comes to loans for home improvement projects.