Best Home Improvement Loans in Idaho

To Sell or To Renovate: That Is The Question

In the past, most homeowners bought a house and lived in it for an average of thirteen years. Although many buyers continue to stay with one home for several years, the average length of how long an owner stays in one home is trending downward. More and more, we’re seeing for-sale signs pop up. Why are so many homeowners eager to sell their homes and buy anew? Well, if these homeowners are like most people (and they probably are), they’re ready for a change. Living in one home for a long time can turn your dream home into a plain ol’ three bedroom shack that’s lost its luster amidst the scuff-mark-stained walls and smelly carpet.

But as real estate theorists speculate that the Idaho housing market might crash, now may not be a good time to sell your house and start fresh. Instead, if you’re looking for ways to get excited about your home, consider sprucing up your house by renovating it. Tastefully renovating your home can restore you with that same starry-eyed thrill you had when you first settled inside. 

Renovations, however, can be expensive. It’s unlikely that you’ll have all the money you need up front, but don’t worry. That’s where Farmers Bank comes into the picture. Farmers Bank has proudly served Magic Valley areas for over 100 years, specializing in home improvement loans. In the article below, we discuss the best options for home improvement loans in Idaho, and how our loan specialists can help you.

Top 4 Home Improvement Loans 

Home Equity Loan

A home equity loan is a home improvement loan that is secured by your home. As a result, it’s loosely known as a “second mortgage.” You’ll get a lump sum of money for your home improvement renovations. Your home can be at risk of foreclosure if you default on your monthly payments. You’ll also want to know exactly what your renovations will cost, too. 

Typically, you’ll need at least 20% equity, a good credit score, and a low debt-to-income ratio for lenders to give you a home equity loan. Additionally, you may have to pay closing costs. See? We told you it’s like a second mortgage.

But there are several benefits to taking out a home equity loan. Your agreed-upon interest rate will never increase. Therefore, your month-to-month payments will also stay the same. And you might be able to deduct the interest you pay from your taxable income. Perhaps best of all, the equity is put back into your home!

Home Equity Line of Credit (HELOC) Loan

Are you uncertain about what your home improvements will cost? Do you plan to remodel your home bit by bit? If you answered, “yes,” then a HELOC may be one of the best home improvement loans for you. With a home equity loan, a bank will lend you money based on what you need at that time (no lump sum). In other words, if you need money to remodel one bedroom and you don’t plan to remodel another bedroom until several months later, the bank will give you the amount you need for the first bedroom and then pay for the second bedroom later. 

Now for the basics. With a home equity line of credit loan, the line of credit a bank extends is based on your home’s equity. Your home is collateral. That means your home can be foreclosed on if loan repayments default. There’s a maximum line of credit, as well. The maximum is based on the home’s equity. 

Initially, you’ll only make payments on the interest. The interest is based on how much money you actually use–not how much credit the bank extended. Unlike a home equity loan, your interest rates vary, so your month-to-month payments will fluctuate, too. The upside of a HELOC is that you don’t have to pay any interest or principal if you decide not to use your HELOC at all.

Cash-out Refinance Loan

If you’re looking for home improvement loans where you can refinance your mortgage, then a cash-out refinance loan may be right for you. A cash-out refinance lets you take out an even larger mortgage loan, with a new interest rate and repayment plan, and literally cash out the difference. You’ll use the difference to pay for your home improvements.

Credit Card Loan

A standard credit card loan makes sense for Idaho homeowners who only want to do a few touch ups here and there. You needn’t worry about foreclosure. And there’s a better chance you can make these monthly payments because you aren’t taking out huge sums of money. If, however, you do default on these smaller payments then it will negatively impact your credit score. 

Select Farmers Bank for Best Home Improvement Loan Options

Farmers Bank is committed to providing you with reasonable home improvement loans at rates you can afford. We understand that choosing a lender is important. That’s why our home improvement loan experts believe in transparency, respect, and quality service. There are no surprise or hidden fees when you choose Farmers Bank for your home improvement loan options. Contact us today to discuss with one of our agents which loan type is right for you.