What is the maximum home improvement loan amount you can get?

Home improvement loans are financed by online lenders, banks, credit unions and other financial institutions. As with other types of loans, the amount you can borrow depends on the lender, the loan type and your creditworthiness.

For example, with personal loans you can borrow up to $100,000. With a mortgage loan you can borrow up to 80 percent of the value of your home.

The better your credit score, the more likely you are to be approved for a larger home improvement loan. Research the pros and cons of home improvement loans before taking out a large loan.

How much home improvement loan can I get?

As with many personal loans, the amount you qualify for depends on your credit score and debt-to-income ratio (DTI). A lower DTI is better because it tells lenders that you can afford to make additional payments.

The maximum amount you can get also depends on the type of home improvement loan you apply for.

• Home equity loans and home equity lines of credit (HELOCs) are based on the equity you have built up in the property. You can borrow against it and use your home to secure the loan. Typically, you are limited to 80 percent of the value of your property.

• A personal home improvement loan is usually unsecured. Approval depends on your personal finances. They can be used for home improvements, although loan amounts rarely exceed $100,000.
• An FHA 203(k) loan, also called a mortgage rehabilitation loan, allows you to borrow for the mortgage and home renovations in one loan. There are two types. One is for projects under $35,000, and the other is for larger, more expensive renovations.

Common Home Improvement Loan Amounts

Home improvement loans typically range from $1,000 to $100,000. You may need excellent credit or a cosigner to get a home improvement loan if you want a larger amount.

But don’t just borrow the maximum amount available. It is smarter to borrow the amount you need for your project. Add a percentage to cover unexpected expenses.

It’s easy to get bids for certain home improvement projects, like replacing your roof. Estimating costs for more complicated projects, such as a kitchen renovation, can be more difficult.

If you really can’t get a good estimate, a HELOC or personal line of credit may be a more flexible and affordable option.

What affects the amount you can borrow?

The amount you can borrow depends on the type of loan you apply for. Government loans often have stricter requirements than private lenders. Usually the amount you can borrow is determined by:

• The loan type. With loans that use the equity in your home, you can borrow more than with an unsecured home improvement loan.
• The current value of your home. If you choose a home equity loan or HELOC, the current value of your property can increase your equity, which can in turn increase what you qualify for.
• Your location. Because your location affects the value of your home and the return on home improvement projects, lenders may take into account where you live when determining what you qualify for.
• Your personal finances. Lenders consider several aspects of your personal finances, but your credit score and your debt-to-income ratio are more important. Focus on increasing your score and lowering your DTI to qualify for larger amounts.

Pay attention to how much you borrow

When considering a renovation or project, you can use a loan calculator to estimate your monthly payments. You want to avoid borrowing more than your property is (or will be) worth. And you need to make sure your monthly payments are manageable.

Additionally, a project budget will help you plan the full cost of your renovation. This can make it easier to qualify for the amount you need – or to determine if saving is the better route.