For many homeowners that aren’t being affected by the sub prime housing crisis, there can be a lot of confusion over what to do with their homes. Many are deciding that the time is right now to get a home improvement loan while rates are low. Home equity loans are generally a more solid risk for banks and many are willing to grant home improvement loans before any other type of financing. According to those in the industry, even though housing values are falling, using a home improvement loan to fix items in your home will only help it retain its value.
“I think the banks are looking to get out ahead of this. Lenders don’t want to be overexposed,” said Joe Belew, president of the Consumer Bankers Association, a trade group for the nation’s largest banks.
In fact, many banks are actually eager to offer home improvement loans. “We’ve done it in a limited way. It’s likely to expand this year as we see declining home prices continuing,” Tom Kelly, a Chase Bank spokesman, said. “The bottom line, we’re trying to build a bigger cushion.”
Banks do recommend that you keep the amount of your home improvement loan relatively small, to increase your chances of approval in these unsteady times.
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