Real Estate Corner…

 Q.  I’m Thinking About Getting A Home Improvement Loan. 
How Should I Go About The Process? 

 A.  You have two options.  You can either get a home equity loan or a home equity line of credit.  Both are secured by a lien against your home.  Each has their advantages and disadvantages.


A home equity loan gives you a set amount of money up front and then allows you to pay it back in a set monthly amount.  It’s frequently organized like a typical loan payment plan.  Usually, lenders will let you borrow up to 85 percent of the appraised value of your home minus the amount of the unpaid mortgage.  The interest rates on this type of loan are some of the lowest rates available and the interest you pay is tax-deductible.

On the other hand, a home equity line of credit allows you to draw upon a pre-approved loan only when you need the money.  Then, you only make payments when there is an outstanding balance.  You can often access this line of credit using either a check from that account or a special credit card. 

One of the downfalls of the line of credit is that it may have a set amount of time you are allowed to draw upon the available funds.  If your home improvements exceed the time limit, you will need to be sure you can either get an extension or another line of credit.  Some of these plans also have a deadline when all of the money must be repaid in full.  Both of these aspects limit the time flexibility for your home improvements to be completed.  


If you need advice regarding what type of home equity loan to get, or to get pre-approved for a home loan, go to http://www.firstoklahomabank.com/prslend.html.