How to Finance Your Project – Shopping for Money

If you’re like most homeowners who add on, you’ll finance your addition by arranging some kind of loan. But before making any loan arrangements you must have finished plans and specifications for your project, and accurate estimates. If you plan to do the work yourself, go to suppliers to establish the costs of all materials; otherwise, your contractor will supply this information. Next you need to determine the type of financing that best suits your needs and for which you can qualify.

What type of financing?

The type of financing that’s best depends primarily on how much money you need to borrow. Once you have a general idea how the terms of various loans relate to your personal financial situation, you can contact lending institutions.

Finance Project How to Finance Your Project   Shopping for Money

You can borrow for home improvements from a variety of sources: commercial banks, savings and loan associations, saving banks, mortgage banks, and credit unions (not to mention rich friends or relatives).

State with a lender where you’re known, where you’ve done business before, such as a bank where you have a saving or checking account, or a credit union where you’ve financed a car. Your past or present business there may be just the right foundation for a new home improvement loan.

Besides loan, you may also be able to finance your project by borrowing against your life insurance equity, refinancing your present mortgage, getting an advance against an open ended mortgage, or remortgaging your home if it is paid for. Check the details of these methods as they pertain to your situation.

Qualifying for a loan

To obtain a loan you’ll need to file an application with a lending institution, stating the purpose of the loan and the amount you need. You’ll also have to provide personal financial data that will convince the lender the loan is a good risk. Before you do that, make sure your financial situation is in order – your credit records will show whether you are a good or poor credit risk.

If Possible, pay off outstanding debts, or consolidate them. And pay off charge accounts that have large balances. Remember, all debts will affect the amount of money you will be able to borrow.


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