Home improvements are often a more economical way of achieving your dream home. Moving to a new property is expensive. You will have agent fees to pay, removal costs, and a host of other expenses, plus you might struggle to find a new home that ticks all the right boxes. Remodelling an existing property makes a lot of sense if the main problem is a lack of space or the kitchen/bathroom is not up to scratch. So what are the options for financing a major home improvement project?
Cash is king and if you have a lot of cash sitting in a bank account, it is not a bad idea to use some of it to improve your home. Interest rates are very low right now so you will see a much better return on your money if you use it to finance a home improvement project. As long as the work is done well and in a style appropriate to the property, your home will be worth a lot more and you should get your money back when you sell.
Take Out a Secured Loan
A popular option with homeowners looking to add a new kitchen, bathroom or small extension is to take out a secured loan on the property. Most lenders will, subject to credit ratings, lend home owners extra cash if they have equity in the property. However, because a secured loan from ukhomeandpersonalloans.co.uk is a charge on your property, if you default on the loan your home is at risk.
If you bought your home some time ago and there is a substantial amount of equity in the property, it could be worth refinancing and borrowing a bit extra to pay for your luxury home improvements. The monthly repayments will be a lot lower if you re-mortgage instead of borrowing the cash via a secured homeowner loan. The downside is that you will end up paying a lot more in interest because the repayments are spread over a longer period of time.
Many large stores offer finance plans to help customers spread the cost of a new kitchen, bathroom, or similar. This could be a good deal if the store is able to offer a low interest rate or interest free terms, but always read the small print before you sign on the dotted line or you could end up paying punitive fees on top of your loan repayments.
Friends and Family Loan
Borrowing money from family or friends to help pay for a major home improvement is a cheap way of financing the project. However, if you go down this route, always make sure both parties are clear about the terms of the loan and when the money needs to be repaid. And if the person lending the money is expecting interest on the loan, it might be a good idea to have a loan agreement drawn up to avoid any misunderstandings.