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Home Improvement Loan Information
A term of legal significance in the context
of the Home Mortgage Disclosure Act, a home
improvement loan is essentially a mortgage
as it is a loan made for the improvement,
repair, or addition to a dwelling which is
itself collateral for the loan. Essentially
if it were possible to obtain a purchase
money security interest in real property a
home improvement loan would meet that
standard as it is to fund additions to the
property which is itself securing the loan.
Home improvement loans include loans made to
improve or repair any dwelling, including a
main home, second home, vacation home, etc.
Do not
make assumptions. If you are unsure about
anything...
ASK YOUR MORTGAGE COMPANY QUESTIONS!
1. Inquire
about all fees and costs associated with
this loan, including the home improvement loan interest rate and APR (annual percentage
rate).
As with any
residential home loan....
2. Do not
assume that the interest of this
loan will be tax deductible. Consult a
qualified tax advisor for potential tax
benefits.
3. Be sure to ask if there is a
pre-payment penalty (prohibited by law in
some states) for paying off the loan
too early or making substantially large
payments against the principal.
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