How to Pay for Your Home Improvement Project Through ISPC Financing
In the past decade alone, banks and financial institutions like ISPC Financing have been coming up with more and more innovative ways to allow you to improve your home. In the early 2000’s, when you wanted to take out a loan for a home renovation, an additional bathroom, or a kitchen remodel, you would have had to appear physically at the bank, submit all your requirements to a loan officer, and leave your fate in his hands.
These days, the market for home improvement loans has become much more competitive, forcing companies like ours to offer better, and more affordable financing programs that are tailored to your needs and credit situation. Given this new climate, we at ISPC Financing have decided to put together a short and simple guide to getting the best financing option available for you.
First of all, it’s important to know how much money you need, and how much you can get. It’s tough to decide how much money you really need for a given project because it’s difficult to draw the line between your needs and your wants. Once you have a rough idea of how much things cost including labor, materials, professional fees, permits, equipment rentals, and inspections if applicable.
Once you have this figure in mind add about 20-30% for surprises and then find out how much you can get from your financing company before you make any commitments to a contractor.
The amount you can borrow, and the terms offered to you will ultimately depend on your credit rating and your proof of income, so make sure that you haven’t been skipping any payments on existing loans and credit cards.
Lenders usually use something called a loan-to-value (LTV) ratio to determine how much they can lend to you can lend. An RTV ratio compares the amount of your loan to the value of what you will be spending on. The limit is usually 80%, which means that you’ll have to pay at least 20% of your home improvement from out of your pocket.
With regards to income, your monthly payments shouldn’t be more than around 28% of what you earn each month, and you shouldn’t have existing loan payments that exceed 36% of your monthly income.
Once that’s settled you’ll have to decide how many years you want your loan rate to be fixed. The longer you want your rate to be fixed, the higher the rate that the lending company tends to apply. For more information, on ISPC Financing, call 800-345-4772.