Being able to do the changes that are needed inside a home is something that is increasingly important. In the current real estate market, many of the people we talk to are deciding to improve their homes rather than buy a new house. When considering a home remodeling project, you should evaluate whether the changes you are thinking about will help your home to look its best and increase its value.  But you also need to be sure that you can afford to make the changes. This is why more and more homeowners here in the Twin Cities are pursing home improvement loans.

But will you qualify?  Start with these steps.  We can't guarantee you will get the loan you want, but evaluating these four things will help give you a better picture of your financial state.

Your Credit History: This is probably one of the biggest factors in the loan decision. You have to have a good credit history and score. Of course, the amount of debt you have, as well as income, also is considered. A higher credit score will get you better rates, but a lower one doesn’t automatically disqualify you. How Much Equity Do You Have in Your Home? Know how much equity is in your home since this is what you’re going to be borrowing against. By having this idea, you can find out how much you might qualify for. This is especially important for those that want to borrow a large amount. What is equity?  Take the current balance on your mortgage and any other obligations tied to your home (such as a lien), and deduct it from its current value.    Go Through an Appraisal: Having an appraisal done is often required by the lender, but not always.  An appraisal isn't complicated. The current value of your home will be established by an appraiser, and the value of your proposed improvements is also taken into consideration. You might learn more about your home through the appraiser who will walk through it.  Sometimes even if you don't have enough equity, if the value of your proposed improvement exceeds its cost, you will likely get approved if you've got other positive elements, such as a great credit score. You should be aware, however, that very few home improvement projects deliver more than 100% of the cost.  Those generally are relatively minor.  Among the major home improvement projects that come close to it are siding replacement (almost 93%, depending on the type of siding). Roof and window replacements are also high on that list of return on investment.    Estimate How Much Cash You Need: Speak with a handful of different licensed Minnesota home improvement contractors to get a price for the project that you want to have done. You should then know how much you’re looking to borrow and can ask the bank for that much. It is important that you leave some wiggle room. It's not uncommon for unforeseen problems to arise, so having a cushion in your budget is wise.  For example, when removing the siding, your contractor might find you have some structural damage that needs repair before the new siding can be installed. Getting an idea of whether you'll qualify for the financing is crucial before embarking on a home improvement project.  We can also give you more information on financing options available and what we may be able to help with here. We've worked with many homeowners over the years, and we are aware of a variety of programs to help get you the cash you need to get your home in great shape.  We are a licensed Minnesota home remodeling contractor serving the greater Twin Cities area.  We specialize in exterior home improvements such as steel siding and roofing.