BBB Tips

Financing Your Project

To obtain financing for your home improvement project you may want to consider a personal or bank loan, a home equity loan, a loan from your credit union or insurance company, or a loan from a savings and loan institution. While your contractor may be able to assist you in securing the needed financing, it is important that you investigate the various sources of funding and compare the amounts, interest rates, terms, and tax considerations.

If you cannot pay for a home improvement project without a loan, it is a wise idea to put a clause in your contract with the remodeler stating that the agreement is valid only if financing is obtained.

Federal Housing Administration (FHA) loans for home improvements may be available through certain banks and other lending institutions. However, FHA requires that the lender approve any contractor arranging for this type of loan, and the agency will not guarantee the work or the contractor. Be wary of any contractor who tells you that he/she has been approved or endorsed by the FHA.

If your home improvement project is the result of damages and is covered by an insurance policy, check with your insurance company or agent to determine the extent of coverage before signing a contract to have the damages repaired.

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