Building or Remodelling to Create a Home Theater
Getting a Home Improvement Loan

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The Home Improvement Loan

Unlike the case of buying your Home Theater equipment, a home improvement loan is the appropriate financing mechanism for building a home theater room or remodelling to create a home theater. The same rule applies:

Match the life of the loan to the life of the asset.

The equipment you purchase may have a 3 to 7 year life, so you finance it with a short term loan. This might be one to three years on a credit card or on a special financing deal by the vendor.

With your home improvement, you will be making major changes to your house. You want those to be nice and you want them to be long-lasting in style and quality. Therefore, you can get a home improvement loan for this financing.

Depending upon your equity in your home, on the investments you plan for the actual building or remodelling project (not the equipment), and certain other criteria, you many qualify for a government home improvement loan -- either an FHA home improvement loan or a HUD home improvement loan. Similarly, the loan may be structured as a second mortgage or may be structured as a personal loan by the lending institution.

A Home Improvement Contractor

You're probably not going to do this project by yourself, unless you are really good and willing to dedicate the time (and the mess) to creating your home theater. Whether you arrange for a general contractor to do the room, from start to finish, or contract with individual carpenters, painters, carpet dealers, etc., this is really a job for the experts.

Unless you know that your craftsmanship will meet your standards and those of future buyers of the house, do not do the project yourself. You want this to be an investment in the house, not something the next owner will rip out to make a bedroom.

How Can I Estimate My Monthly Payment?

You can use a home improvement loan calculator, available freely at almost any company offering home improvement loans via the web, to estimate the amount you can borrow at current rates for a given monthly payment. Alternatively, that same home improvement loan calculator will give you the monthly payment if you specify the loan amount.