The best time to apply for a home improvement loan is when you have a large renovation project you want to tackle. That could be adding another bathroom to your home, roofing your house or installing a pool, or any other major home-related project. This type of loan is a good option if you don’t have a lot of equity in your home to draw from but need or want to make home improvements.
• Your house payment alone (including principal, interest, taxes, and insurance) should be no more than 28 percent of your gross monthly income. The maximum debt-to-income ratio rises to 42 percent on second mortgages. Some lenders go even higher, though fees and rates get expensive — as will your monthly payment. However, a debt-to-income ratio of 38 percent probably is the highest you should consider carrying.
The product requires an origination fee of $50, which may be financed (for TX homestead properties, the origination fee can't be financed). The origination fee is waived if you are already a Chase home equity customer. The customer is responsible for a $50 annual fee after the first year, except for TX homestead properties. The annual fee is waived for customers who secure a new Chase Home Equity Line of Credit and open a new or have an existing Chase Premier, Chase Premier Plus or Chase Sapphire checking account.
Additionally Chase customers can qualify for a rate discount of 0.12% with automatic payment to their home equity account from their Chase checking account. To be eligible for a 0.12% rate discount, before closing, a customer must: (1) have an existing or open a new Chase personal checking account, and (2) enroll in the Chase automatic payment service for home equity accounts. With this service, their home equity account payment will be automatically deducted from their Chase personal checking account. Payments must go directly from a Chase personal checking account to the Chase home equity account and can't be managed by third parties.
Finally, compare those fees carefully. When you meet with a lender, up-front costs will start with a credit report running $50 to $80 and possibly an appraisal, which should cost less than $300. Some lenders use your property-tax valuation, others won't. Often, you can reduce lending fees in a competitive market. And if you're asked for a nonrefundable application fee, beware; reputable lenders try to keep up-front fees low.
Your credit score: It’s smart to know what are your chances of qualifying before you apply for a loan. Get a free copy of your credit report from each of the major credit-reporting bureaus: Equifax, TransUnion and Experian. You are entitled to one free report a year from each bureau. The most favorable rates go to borrowers with the best credit scores. Every lender you apply with will check your credit score and credit history.
Tools and Calculators: Tools and calculators are provided as a courtesy to help you estimate your financial needs. The results yielded by these tools and calculators are merely estimates and they don’t guarantee available credit amount, potential savings or the like. Chase makes no warranty regarding the tools or calculators, nor regarding the results they produce. Should you have any questions about your financial situation, Chase strongly recommends that you consult with your own financial advisor.
After the kitchen, you may want to think about remodeling your existing bathroom. If your house is older, you may be sporting pink, blue or avocado tile or outdated fixtures. Even if your home is newer, styles can change. Invest in neutral-colored tile and give the room some personality with a fresh coat of paint, wall hangings and a new shower curtain. Update lighting fixtures and install a low-flow toilet to save on the water bill. You may even want to add a new vanity and matching mirror.