Large Home Improvement Loans

When it comes to a large loan for home improvements, there are plenty of options. Some of the most traditional places to get a large home improvement loan include local banks and credit unions. However, in recent years online lenders are growing in popularity. Before choosing a lender, you will need to decide what type of loan you are pursuing. Here are some of the best ways to acquire larger sums of money for home improvement projects that may be more expensive due to the size and or scope of the project.

• Personal home improvement loans: Personal home improvement loans can be found through an online lender or your personal bank or credit union. Lenders can have maximum loan amounts up to $100,000. Before applying with a lender you will want to ensure they can offer a loan amount large enough to meet your needs. Qualifying for the loan will be another part of the equation. If you are looking for a personal home improvement loan that is close to $100,000, you may need to have excellent credit, a high income, and/or a co-borrower who is going to also be responsible for the loan. For example, if you own your home with your spouse, it may be better to apply for a $100,000 personal loan as co-borrowers so that the lender considers both of your incomes and credit scores when they are processing the loan application.
• Home equity loans and home equity lines of credit: If you are looking for a loan amount of over $100,000, then you may need to consider using a home equity loan or a HELOC to obtain that large of a sum. The catch is, you may have to have owned your home for many years in order to build up more than $100,000 in equity. That being said, there are plenty of benefits to using a home equity loan or a HELOC to pay for renovations even if you only have $50,000 or $75,000 of equity in your home. Home equity loans and HELOCs often come with lower interest rates and lower monthly payments when compared to personal loans for the same amount.
• FHA 203k rehabilitation loan: If you qualify for an FHA loan, you may be able to borrow up to 100% of the property's anticipated future value based on the plans that are submitted detailing the renovations that are to be completed. Depending on the value of the home, you may be able to qualify for a loan up to the maximum amount of $420,680 set by the FHA. This maximum loan amount is for single-family homes. Properties that have additional units may qualify for larger amounts. Additionally, if the home is located in a higher-cost county designated as such by the FHA, then the maximum loan amount raises to $970,800 for single-family homes.
• Cash-out refinance: A cash-out refinance allows you to take out a new mortgage to pay off your old mortgage and to keep any leftover money once the transactions are completed. For example, if you owe $110,000 on your current mortgage, but your home is worth $450,000, you may be able to refinance your home with a new mortgage for $220,000. Once you receive the money from your new mortgage, you can use $110,000 to pay off your old mortgage and then use the remaining $110,000 for home renovations.
• Other government loans programs: Aside from FHA loans, there are a number of government agencies that provide home renovation loans. The requirements for these loans and the maximum loan amounts these agencies offer vary. However, when you are looking for a large home improvement loan, you may want to explore all of your options including renovation loans through government agencies like HUD, VA, USDA, Fannie Mae, Freddie Mac, and more.

No matter which avenue to explore for obtaining a large home improvement loan, in order to qualify for the larger loan amounts, you should make sure that you have a good or excellent credit score (720+) and that you have a significant amount of income with very little existing debt.

One of the easiest ways to get a large personal home improvement loan is through an online lender. There are many online lenders who help borrowers obtain home improvement loans every day. But, do online lenders give out larger loan amounts, or is it only conventional financial institutions that can provide the larger loans? Online lenders can offer extremely competitive loan offers, especially when it comes to unsecured personal loans. At Acorn Finance you can check offers from lenders such as LightStream and SoFi, that can offer personal loans up to $100,000. You can also check loan offers from Axos Bank, Best Egg, and Upgrade that can offer personal loans up to $50,000. Let's compare these top-rated lenders.

Loan amounts: $5,000 to $100,000
APR: 6.99% to 16.49%
Terms: 2 to 12 years
Fees: None (no origination, late, or early pay-off fees)
Minimum credit score requirement: 660
Funding time: As soon as one business day

Loan amounts: $5,000 to $100,000
APR: 5.99% to 20.94%
Terms: 2 to 7-years
Fees: None (no origination, late, or early pay-off fees)
Minimum credit score requirement: 680
Funding time: Within a few business days

Loan amounts: $2,000 to $50,000
APR: 5.99% to 29.99%
Terms: 3 & 5-years
Fees: Origination fees between 0.99% and 6.99%
Minimum credit score requirement: 600
Funding time: As soon as one business day

Loan amounts: $1,000 to $50,000
APR: 6.94% to 35.97%
Terms: 3 to 7-years
Fees: Origination fee better 2.9% and 8%. 10$ late fee after 15-days past due.
Minimum credit score requirement: 560
Funding time: As soon as one business day

Loan amounts: $5,000 to $50,000
APR: 7.99% to 35.97%
Terms: 1 to 5-years
Fees: Origination fee of up to 2%
Minimum credit score requirement: 700
Funding time: As soon as one business day

Since personal home improvement loans max out at $100,000, if you need more than that, you may want to consider using a home equity loan. If you have a home that has a higher fair market value and you owe a smaller amount on the mortgage, you may have a large amount of equity. Home equity is determined by the fair market value of a home minus the current balance of the mortgage. Typically, lenders let homeowners who qualify, borrow up to 80% or 85% of the equity they have built into their home if that equity is equal to or greater than 20% of the total value of the home.
There are many advantages and disadvantages to using a home equity loan to acquire a large home improvement loan. Here are some of the most common pros and cons a borrower may experience when pursuing a home equity loan.

Pros:

Fixed interest rate: Most home equity loans come with a fixed-rate meaning that you will know exactly how much interest you will pay over the life of the loan and what your monthly payment will be each month. This is different from a home equity line of credit that may have a variable rate that can change throughout the draw period and payback period.

Lower interest rates: Since home equity loans use your property as collateral to secure the loan, mortgage lenders may be more willing to offer better interest rates that are lower than personal loans, credit cards, and personal lines of credit.

Longer repayment terms: Repayment periods on home equity loans can be anywhere from 5 to 30-years, depending on the loan amount and the lender. Couple a longer loan term with a lower interest rate and you may be able to lock in some lower monthly payments that may not end up being too expensive in the end.

Interest can be tax-deductible: Any interest that is paid on a home equity loan during any given tax year may be tax-deductible on your following year's income tax filing.

Cons:

You are using your home as collateral: The main drawback to a home equity loan is risking losing your home if you should happen to fall behind on the payments and default. Since your home is the collateral securing the loan, if you should happen to default, then the lender has the right to foreclose on the home. Another risk of using your home as collateral is owing more on your home than it is worth. For example, if you qualify for a home equity loan based on an appraisal done during an upswing in the housing market and then sometime later the housing market takes a steep decline, you could have a home that is worth less than the amount you owe between your primary and secondary mortgages.

Can be hard to qualify for if you have bad credit: Although you are using your home as collateral to secure the loan, lenders typically want to see a minimum credit score of 620 plus a steady income with little existing debt other than your primary mortgage.

Need to have substantial equity in your home: To be able to borrow against the equity of your home, many lenders may require you to have at least 20% equity in your home.

Consequences for selling your home: If you eventually decide to sell your home, you will need to pay off your primary and secondary mortgages all at once at the time of sale.

In addition to a home equity loan, if you are planning some home renovations that are going to be completed over the course of a year or more, you may want to consider looking into a home equity line of credit. A home equity line of credit works the exact same way as a home equity loan except you can only borrow what you need when you need it as many times as you would like instead of getting one large upfront payment.

The largest personal home improvement loan that you can obtain from a lender is $100,000. If you are looking for $100,000 from a traditional bank, Wells Fargo is known to offer home improvement loans of up to $100,000 for those who qualify. You can always inquire with your personal bank to see what their maximum loan amount is for personal home improvement loans. When it comes to online lenders, both Lightstream and SoFi offer personal home improvement loans of up to $100,000 for qualifying borrowers.

Minimum credit score requirements vary by lender, loan type, and loan amount. When it comes to personal home improvement loans, some lenders may have a minimum credit score requirement of 600, while others may allow a credit score as low as 560. Also, some lenders may want to see a minimum credit score of 660 or 680 before considering a borrower for a personal home improvement loan.
When it comes to home equity loans and home equity loans, most mortgage lenders may want to see a minimum credit score of 620 or higher. The same goes for cash-out refinances.

When it comes to government-backed home improvement loans, credit score requirements vary by government entity.

Personal loans should be relatively easy to qualify for. While there are loans that are even easier to qualify for such as emergency loans, payday loans, or bad-credit no-credit-check loans, these loans may come with a big downside. These types of loans come with some of the highest interest rates and fees. If you find yourself in a position where you can only qualify for one of these types of loans, unless it is an emergency, like fixing a broken furnace in the middle of winter, then it may be best if you reevaluate whether or not your home improvements need to be done at this moment or if they can wait.

Renovation mortgages may be a good idea for a responsible homeowner who may not have a lot of cash saved up but who can easily make the monthly payments on a home renovation loan. Renovation mortgages are a great way to get your hands on a much-needed large lump sum of money, however, there are some risks you should know about. If you take out a home equity loan, home equity line of credit, or complete a cash-out refinance, then you are using your home as collateral to secure the loan. You will want to make sure you are only borrowing what you can afford and that you lock in a monthly payment that you can easily pay each month. If you start missing payments and risk foreclosure, you could lose your home.
As a safety net, you may want to consider having at least 6-months of mortgage payments set aside in a savings account to be able to cover the mortgage payments if something should happen.

Monthly payments on a large loan are determined by the length of the loan, the loan amount, and the loan's APR. These three factors together determine the monthly payment. The best way to get some estimates about what your monthly payments may be on a large loan is to prequalify.

For personal home improvement loans, the largest loan you can get is $100,000. Home equity loans and home equity lines of credit amounts are determined by the value of your home and the amount of equity you have. When it comes to government renovation loan programs, each agency has its own guidelines for minimum and maximum loan amounts.

Anytime you take out a line of credit, there are severe consequences for not being able to pay back the loan. If you take out a large unsecured personal loan to fund home renovations, if you should default, you risk destroying your credit. A default on a personal loan can adversely affect your credit for up to 7-years or more. Also, if you default on an unsecured personal loan, you may find yourself being sued by the lender. If the judge grants the lender a judgment, they may be able to place a lien on your home or personal property to obtain the amount they are owed. The larger the loan amount, the more likely you may see yourself in court facing a lawsuit.
If you default on a home equity loan or HELOC, then the lender may foreclose your home and sell it to recover as much of the loan balance as they can.