Home loan or personal loan

Personal Loan or Home Loan? That is the question.

We love to decorate our houses.

And there are times in our lives when we may have spent too much time on Food Food or TLC, building castles in the air with visions of turning our kitchen into a chef’s paradise. Or maybe our master bathroom is just a shower away from disaster. Because we love Italian tiles in our bathrooms.

And if so, then cheers, you are not alone. Recently, Harvard University’s Joint Center for Housing Studies researched and reported that the home improvement industry should continue to record spending in 2016. For many people, this means borrowing money to pay for the well-planned DIY and home decorating programs.

Now one should ask oneself a difficult and difficult and perhaps hypothetical question.

So which mortgage loan is right for you?

Many homeowners and housewives want to tap into the equity of their homes. But home equity loans or home equity lines of credit may not be possible or very practical for some borrowers. In this case, you should consider a personal loan.

While it is well known that one can take out a personal loan for a variety of reasons, there are a few reasons why a personal loan can have advantages over home equity loans, specifically when it comes to a home improvement loan.

The application process for a personal loan is usually quite simple and fairly straightforward. Your own financial situation – for example, your creditworthiness and earning capacity; this is often decisive for whether you get a loan of what amount and, if applicable, at what interest rate. Some personal loans even boast of having no processing fees.

A home equity loan or home improvement loan, on the other hand, is similar to applying for a mortgage (in fact, home equity loans are sometimes referred to as second mortgages). How much you can borrow depends on several factors, including the value of your home. Because you can only borrow on your existing equity (ie, the difference between the value of your home and your mortgage), you may need to arrange and pay for a home appraisal.

Now let’s consider this case in the case of a home improvement loan. With a home equity loan or home improvement loan, you can only borrow against the equity you have — which as a new homeowner probably isn’t much. Maybe you haven’t had enough time to pay off your mortgage and the market hasn’t increased the price of your home yet. A personal loan allows you to start renovating your home, no matter how much equity you have. So that’s one benefit of taking out a home loan.

With a home equity loan, you’re using your home as collateral, which means a failure to repay it could result in your home going into foreclosure. While defaulting on your personal loan comes with its own set of risks (like ruining your credit score and credit rating), it’s not tied directly to the roof over your head like a gun on your head. Therefore, it is better and safer to take a personal loan.

So if we had to choose which one is better and safer and more suitable?

Personal loans may not be right for every borrower looking for a home improvement loan. For example, if you have significant equity in your home and want to borrow a large amount, you may be able to save money with lower interest rates on a home equity loan. Interest payments on home equity loans and lines of credit may also be tax deductible in certain circumstances; However, this is clearly not the case with personal loans.

On the other hand, personal loans can make sense for these types of customers:

• New home buyers.

• Minor home improvement loans (e.g. bathroom or kitchen versus a full renovation)

• Borrowers in lower home value markets (if your home value hasn’t changed much since you moved in, you may not have much equity to draw on a home equity loan).

• For those who value simplicity and speed.

• Borrowers with excellent credit and cash flow.

While home equity loans and lines of credit are a good source of money for home renovations if you’ve already built equity in your home, a personal loan can be a better alternative if, for example, you’re a new homeowner and need to take care of a few updates, to make your new home just right and perfect.

In conclusion, we conclude that a personal loan is always a better option than a home loan.