home improvement loan banks

How to Find the Best Bank for Your Home Improvement Loan

 When you’re looking to take out a loan you want to choose the best bank possible so your financing can go smoothly, without issues. Home improvement is already stressful, so finding a good bank can relieve many problems. Don’t just pick the closest location near you for convenience purposes—first, read how to find the best bank for your home improvement loan.

Check FHA 203k certification.

One of the best ways to improve a potential or recently purchased home is to get a Federal Housing Association (FHA) 203k loan. These loans give people the chance to buy a home that needs work and fix it up to make it their own. Granted, you’ll have to use FHA approved contractors, and you can’t change everything about your house, but there are plenty of ways to get the house you’ve always dreamed of. Before you walk into a bank, see if they’re FHA 203k certified—it shows that the bank is experienced with financing home improvement projects.

Interview your lender.

Your lender is the person you’ll talk with throughout the entire process. Sit down with each bank and share your complete plan with your lender; ask if they can explain everything in a way that you can understand without confusing terms or concepts. You also need to question your lender on how long the process will take so you can avoid potential delays down the line. Most importantly, ask the lender if they’re experienced with home improvement loans.

Talk to the other employees.

The best bank for you to choose is one where the employees are happy and glad to help customers—visit on multiple occasions and strike up a conversation with the employees to see if they’re receptive. If there seems to be high employee turnover, you may consider visiting another bank. While this may not always be the case, a happy employee is much more likely to understand and help the client.

Compare loan options.

There are many different types of loans to make home improvements. Various types of loans include refinancing your mortgage, an FHA 203k loan, or a home equity line of credit. These are all ways to finance your renovations, and each loan is significantly different. While you can loosely compare two different types of loans, it’s difficult to compare apples to oranges. To understand whether terms are good, compare the loan to another of the same kind.

Consider more than just interest rates.

The best bank may not have the best interest rates. A great bank focuses on you and what you need out of your loan. While a low-interest rate would be preferable, you need to consider the length of the loan and the terms you’ll have to follow. Even if an interest rate is incredibly low, the terms may not be agreeable. Read each loan carefully to fully understand what you get out of your financing.

Last Updated: July 15, 2016