Navy Federal Home Improvement Loan

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Navy Federal Home Improvement Loan

Navy Federal Home Improvement Loan. How essential are the improvements you really want? Some home projects may wind up costing you over the value they provide. That does not mean certain projects are not rewarding. For instance:

Repairing a leaky roof or faulty plumbing might spare you away from water or mold damage.
Installing loft and wall insulation and energy-efficient windows or replacing older appliances and light fixtures will lower utility bills and may be tax-deductible (see www.energystar.gov for advice regarding tax credits and rebates).
The IRS allows tax deductions for certain home improvements to accommodate medical conditions or disabilities with a doctor’s recommendation. The rules are complex, therefore read IRS Publication 502 at www.irs.gov and consult with a tax advisor before proceeding

Budgeting

Collect cost estimates for each job or item and create a chart with columns for high-, medium- and low-cost options. Don’t forget supplies for do-it-yourself jobs and always add an additional 20 percent or more for unforeseen expenses. If contracted labor is involved, gather three quotes and carefully check references and company licenses. Also, ask about discounts for group many projects together.

Ideally, you have already established a home improvement savings plan. But if you’re intending to borrow, proceed with caution. Only a few years ago, home values were skyrocketing and several people took out a home equity loan (HEL) or line of credit (HELOC) to exploit their home’s equity. But then the actual estate market collapsed , leaving many people owing more than their homes were worth.┬áNavy Federal Home Improvement Loan

Lenders are more careful now and need stringent revenue documentation and have decreased the debt-to-value percent they’ll allow. So now, even if you’ve got excellent credit and substantial home equity, it might be more difficult to come across such funding.┬áNavy Federal Home Improvement Loan

One important warning

HELs and HELOCs are considered secured debt in which your home is used as collateral for the loan. Should you miss payments or default, you could lose your house. If you’re unsure, you are going to have the ability to earn the payments (worries about unemployment, prolonged illness, etc.), it is probably better to forego remodeling till you have enough savings.