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 Finding home improvement loans
Before starting any new home improvement project the question of financing should be considered very early on in the process. Not only will many projects be very expensive, the actual value they will add to the home needs to be carefully considered.
Many people make the wrong assumption that any home improvement project will add value to a home. Of course most do, but to what extent? If the type of project is one that has limited appeal, then when you sell your home, any additional value could depend hlargely on who is buying your property. Safer bets like new kitchens and bathrooms are more likely to find favour than saunas and hot tubs.
There are many sources available when raising finance for home improvements, the most common being personal savings, remortgaging, personal loans and secured loans. Overdrafts are sometimes used but extreme care is required and the case is similar if using credit cards to fund a project. You would need to know that you will have ready funds available to pay off this type of borrowing very quickly, otherwise high interest charges could ensue.
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Advantages of types of home improvement borrowing?
Remortgages
A single source of funding for the project that can be repaid over the lifetime of your mortgage. Rates are usually very competitive and can even be fixed rate. Monthly repayments are likely to be lower than for a standard loan or credit card borrowing, but the total amount of interest repaid is likely to be higher.
Loans
The cost of the loan is often fixed at the outset so you know exactly how much you will be repaying each month. No need to go through the hassle, and sometimes expenses, of arranging a remortgage. Some loans are available on an unsecured basis, so do not require the security of your home as colateral. Interest rates are still quite low currently and loans can be paid off quickly if you have the money available.
Credit Cards
A flexible source of borrowing that may not require any application for credit if your existing credit limit is high enough. The size of monthly repayments can be varied according to your ability to repay each month. Interest rates are typically higher than for loans, but you may be able to take advantage of interest free offer periods. You have the option to pay off the credit in full without penalty charges in most cases.
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