- 1). Check your credit file with the three major credit bureaus. Make sure all the information they hold on you is up-to-date and that your report is free from errors. A wrongly reported missed payment could cause a loan application to be rejected.
- 2). Establish how much you need to borrow by costing the work you plan to carry out. Work out how much you're going to need for materials, labor and any other costs. If you're planning to take some time off from work to do the renovations yourself, you'll need to factor in your living costs if you're taking unpaid leave.
- 3). Discuss your options with the provider of your current mortgage. If you have a large amount of equity in your property, you may be able to apply for a home equity loan. This allows you to withdraw some of the equity in your property to spend on renovations. Home equity loans usually charge less interest than a standard loan. If you're still in the process of buying the property you plan to work on, look for a renovation loan. These deals allow you to borrow a set amount on top of your mortgage to spend on renovations.
- 4). Search the market for a personal loan. If you're unable to secure the money you need from the provider of your mortgage, you can approach other lenders. Although some banks offer loans that are supposedly tailored to borrowers who want to work on their homes, you can use funds from a standard personal loan to finance home improvements. Use price comparison sites and ask for referrals from friends and family to sniff out the best deals. If you're going to be spending a few months working on your home or need to rent alternative accommodation while work is carried out, look for a loan that offers an introductory payment holiday. You'll have a better chance of being approved and securing a competitive rate of interest if you use any savings you have to pay off debt before making your application.
- 5). Contact the Department of Housing and Urban Development to discuss your eligibility for government loans and grants. There are a number of federal and local programs available to homeowners and renters who want to improve their homes.
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