Sometimes getting the money together to finance it is the hardest part of a home-improvement project. Bankers are fairly careful about handing out money, and they have a lot of safeguards to make sure they're going to get it back.

If you're planning to buy a house that needs rehabbing, or to borrow money to improve the house you live in, you need to secure the financing first.

That may seem like obvious advice, but in practice, there are some obstacles you may not expect.

A house ripe for rehab often has lower sale prices. It may look like a great deal, and you may even have the cash to snap it up.

The problem is that once you own it, you can't borrow more than the market value of the house. And if it's in bad shape, you may not be able to borrow even that much. So unless you've got enough cash left to fix it up, you'd be better off borrowing the money to buy it and using the cash to rehab.

"If the house appraises with no functional inadequacies, you can get a conventional first mortgage," says Karen McGarry, assistant vice president at American National Savings Association in Baltimore. "Then you can add rehab money for updates."

Basically there are three ways to get money for home improvements: Refinancing; a home-equity loan; and a personal note.

In the case of the first two methods, the key word is "equity," which is the residual value of the property beyond what is owed on it. In other words, if you still owe $40,000 on your property and its market value is $100,000, you have $60,000 in equity. If you still owe $140,000, and the market value is $145,000, the equity is only $5,000.

"If someone's been in the house long enough and has a little

equity," says Marge Calcara, a mortgage office at First National Mortgage Corp., they can do a 'cash-out' refinancing." That means paying off the first mortgage and collecting equity as cash.

There's a catch, however: You will not be able to borrow all of the equity. It can vary from place to place, but Ms. Calcara said 75 percent is a standard amount.

That means that if the house is worth $100,000, you can only refinance for $75,000. If you pay off $40,000 still owed on the first mortgage, you'll end up with $35,000 for your rehab or improvement.

In a home-equity loan, the first mortgage remains and the amount you can borrow will fall somewhere between what you owe and the appraised value of the house. Once again, you can't borrow up to 100 percent of the appraised value. And once again, banks will vary in the percentage they allow you to borrow, though generally it will be in the range of 80 to 90 percent.

For example, if the house appraises for $100,000 and the lender will allow 90 percent, that's $90,000 maximum debt. If you still owe $60,000, you will not be able to borrow more than $30,000.

If you don't have much equity, you may still be able to borrow enough money for a particular project -- to replace a heating system, for instance, or rebuild a porch -- with an "unsecured" personal note.

Such a loan is likely to have a higher rate and a shorter term, however, and the interest is not tax-deductible, because it is not secured by the property. Be sure you understand the rate, and be sure the payment is comfortable for you.

It's usually not a lot of money, either. At American National, the maximum loan amount for such a note is $5,000, Ms. McGarry said. "They are not a big part of the market," she said, but she added that some lenders may allow as much as $15,000. "You need to shop around," she said.

There's another catch to all of this, of course, and that is that however the numbers work out, you may still find lenders reluctant to hand over any money unless you have a very clear idea of what you're going to do with it.

Both Ms. McGarry and Ms. Calcara emphasized the need for good plans and specifications. In some cases, lenders may require written bids and plans. On bigger loans, you may be required to have a general contractor. The lender may also hold the construction funds in escrow and pay them based on inspections.

If you're buying a house you plan to work on, get a good home inspector who has experience with costs and with older houses to help you figure out exactly what you need. If you have something specific in mind, or are simply interested in one project, a home-improvement contractor or architect may be able to help. (If you're just looking for an evaluation and not a bid, be sure he or she understands that before you begin.)

It's a good idea to do plenty of research and get everything in writing before you even approach the lender. To get any kind of construction loan, Ms. McGarry said, "You need to be organized."

Next: Conflict management.

Mr. Johnson is construction manager for Neighborhood Housing Services of Baltimore. Ms. Menzie is Home Editor of The Sun.

If you have questions, tips or experiences to share about working on houses, write to us c/o HOME WORK, The Sun, 501 N.

Calvert St., Baltimore 21278. Questions of general interest will be answered in the column; comments, tips and experiences will be reported in occasional columns.

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