A good credit score is a basic requirement for traditional home loans, but can you get home improvement loans with bad credit? Home improvement loans meant specifically for remodeling, renovating or repairing your home have similar financial requirements, but can offer a bit more flexibility. Here are the important things to know:
Lenders generally require a minimum credit score of 660-700 to qualify for a home improvement loan. While some approve lower scores, the trade-off is usually a much higher interest rate on the loan.
The Federal Housing Administration (FHA) offers loans for borrowers with lower credit scores. If you need financing with lower credit, both the FHA 203(k) renovation loan and FHA Title I loan programs are worth investigating.
To borrow against your house, you need to take out a home equity loan or a home equity line of credit (HELOC). These options use your home as collateral, and allow you to borrow money against the total value. Home equity loans are better for large, one-time projects, while a HELOC is more helpful for funding smaller ongoing projects.
The best ways to build and increase your credit score are to:
Unfortunately, improving your credit score won't happen overnight. If you're in need of a time-sensitive renovation, consider these options for obtaining financing - regardless of your credit history.
My name is Lauren and I am passionate about matching people with their perfect home. Even with price constraints, location needs, and other factors that people think limit them, I believe with all my heart that everyone can still have the perfect home for them!
As a happy member of the Hillman Homes team, I can tell you that our boutique office offers you a friendly and customized approach. There are no shortcuts and no one-size-fits-all approach to home buying at Hillman. We work with you the way that is best for you.
