The Smartest, Simplest Way To Pay For Your Home Improvements

This is a “sponsored post.” LightStream compensated FOF with an advertising
sponsorship to write it, and provides more information at LightStream.com. Regardless,
I only recommend products or services I believe will be helpful for our readers.
All insights and expressed opinions are my own. —Geri Brin

Ed Note: This article is a must read for 57 percent of you who own a home and plan to spend money
on home improvement projects this year.

David and I were forced to leave our rental apartment in New York three years ago because the building was being converted into trillion dollar condos (OK, not trillion, but multi-million). We decided to move back into an apartment I’ve owned since 1992, where my daughter and her husband had been living. They were moving elsewhere. One problem: The apartment needed lots of work, since I hadn’t done anything with it in years.

We needed to paint every inch, remove the outdated built-ins in the bedrooms and living room; install new lighting (the apartment doesn’t get a lot of sun and I wanted a ceiling and wall lighting system that would simulate daylight); put new countertops in the kitchen and one bathroom; hang new window treatments all over the place, redo the hardwood floors, and on and on.

David and I are not the DIY types, so it was going to cost us a bloody fortune to get the job done. Nothing is reasonably priced in New York City. Since I had no intention of living in a dingy, depressing-looking place (my daughter and her hubby were 29, so they didn’t care!), I bit the bullet and withdrew money from my investments to pay for the renovation.

I love the way the apartment turned out, but I have a smaller financial “cushion” than I enjoyed before.

Had I only known I could get a home improvement loan, at a great interest rate, and not even have
to put up a bit of collateral. Not a bit.

My investments could have stayed where they were, earning me more than the cost of the loan.

Anyway, that’s water under the bridge, as they say. But it’s my duty, as the gatekeeper for FabOverFifty, to save any of you from making the same mistake. And, there are a lot of you out there who will be making home improvements of one kind or another this year. In fact, 57 percent of homeowners plan to spend money on home improvement projects, according to an annual survey by LightStream, an online lending division of SunTrust Bank, conducted by the respected Harris Poll. Thirty-six percent plan to invest $5,000 or more on the improvements, a significant increase over 2014, with 18 percent planning to spend more than $10,000!

Like David and me, over half of homeowners planning renovations this year will tap into savings, while
30 percent plan to use credit cards.

What I didn’t know, but would have been delighted to hear, is that I could have possibly financed my apartment renovation at a low fixed interest rate, and pay off the loan agreement from my income. This would have allowed me to keep my assets intact and avoid using credit cards to pay for the expenses.

As a matter of fact, LightStream is offering qualified customers unsecured home improvement loans
at rates starting as low as 3.99% APR with
AutoPay, through May 2015.

LightStream doesn’t require you to complete complex paperwork for its approval process, and you don’t have to secure collateral as with other types of loans. Plus, if you have good-to-excellent credit, you can apply online for a home improvement loan in the morning and have the money in your checking account as soon as that same afternoon. (As you’ll see below!)

FOF spoke with Julie Olian, vice president at LightStream, to learn more about its home improvement financing, so we can create our dream homes, without having nightmares about bills.

FOF: Do you have any advice on how to decide how much you should spend on home improvement?

LIGHTSTREAM: We would never encourage you to spend more than you can afford, on anything. But we believe that anyone who has good-to-excellent credit, proven over the years, is smart with her money and really knows how to manage her finances. LightStream is a great financing option for those who don’t want to liquidate high-performing assets.

If you’ve saved specifically for part of the renovations you’d like to do, you can finance the other parts, if it makes financial sense. Sometimes there are cost savings to having all your construction done at the same time.

How high do your home improvement loan interest rates go, and what determines the rate?

Though rates can change, our current fixed rates for home improvement financing (with AutoPay) start at 3.99% APR (a special promotion through May 2015) and go up to 9.74% APR with AutoPay, depending on the size of the loan; the length of time for which it’s taken; and the borrower’s unique financial position. We look at every applicant individually.

How much can I borrow for the home improvement?

You can borrow from $5,000 to $100,000.

How is this different than a home equity loan?

There’s no need to leverage valuable home equity. A LightStream home improvement loan is unsecured so it is lien and collateral-free. It’s a great solution for people who may not have equity to tap into. Nearly 35 percent of homeowners do not have sufficient equity in their homes to leverage, according to the second quarter 2014 Zillow Negative Equity Report.

Lightstream provides unsecured personal loans. Why don’t you require any collateral?

We lend to people because they have shown that they manage their finances responsibly. You might have a car that you’ve paid off; are up to date on your mortgage payments; don’t have a lot of credit card debt, and aren’t under water with things such as college loans. You’ve demonstrated, over time, that if you take out a loan, you pay it back.

We believe that if you’ve managed your finances well, you deserve a better loan experience.

Are there any ‘hidden’ fees?

LightStream does not charge fees. Period. What you see is what you get. We don’t charge to apply nor do we add points (a percentage of the loan amount that’s tacked on to the loan itself), closing costs or account servicing charges. Also, the interest rate on your loan is fixed (and highly competitive!), so it won’t go up over time.

Please summarize the process for getting home improvement financing.

Simply fill out and submit a brief application that you’ll find online at LightStream.com. During business hours, we’ll review your credit, savings and assets, and get back to you quickly. If you’re approved, you’ll receive an email, detailing a few short steps necessary to e-sign your loan agreement, set up monthly billing and choose a funding date to activate your loan. If you complete the application and documentation before 2:30 PM (Eastern Time), you can have the money deposited in your bank account as soon as the same day. It’s a quick, straightforward process that can be done entirely online. (Although we do have an amazing customer service team that’s available to answer your questions.)

Once you receive your funds, you can use the money with any vendor, for any service or product you choose. The painter, electrician, plumber, or any other cost associated with the work can be paid for with your LightStream loan.

How do you determine “good” credit?

You can find answers to this question, and others, on our website, but generally, someone has “good” credit if they have several years of credit history with a variety of accounts types, such as major credit cards, installment debt (a car loan, for example), and mortgage debt (if applicable). They also have few, if any payment delinquencies; have shown an ability to save; and have a sufficient income and assets to pay back current loan obligations, as well as the new loan from LightStream.

Once a home improvement loan is approved, do I have to accept it right away?

No, our offer is good for 30 days.

Click here for more information and to apply for
a LightStream home improvement loan.