Do you want to make some home improvements this year? Would you like to build an extension or fit a new kitchen and bathroom? Then you’re probably searching online for information and tips about the best finance options available to you, right? Well, you’re in luck because this article will highlight some of the best solutions on the table and let you know a little bit about the pros and cons of each.
You should read through this post before attempting to work out which are the best financing options for you. So long as you have a decent credit rating and you haven’t missed any payments recently; there is no reason you can’t use a combination of these solutions too.
If you’ve paid your mortgage for a few years since taking it out; there is a chance you have managed to build lots of equity up in your property. A remortgage deal could help to release some of those funds and pay for your home improvements. However, you need to read the small print and ensure you understand the ins and outs of the deal before pushing ahead.
If you have a low-interest rate on your mortgage at the moment, there is a chance you could lose that and increase your monthly payments. That is one of the main reasons homeowners consider second charge loans sometimes. They work in much the same way. They provide access to your equity, but they do not replace the original mortgage arrangement.
All homeowners with reasonable credit scores can apply for secured loans. They are forms of lending where you use your property as collateral. It is usually the best option because the lender does not face significant risks because they know they can repossess your house if you fail to pay. Of course, on the flipside, that means you need to be 100 per cent confident you will never miss a payment.
It is also possible to get secured loans backed by other assets you might own like your car or something similar. Again, make sure you always read the small print and grasp the finer details before signing on the dotted line. The best thing about secured loans is that you can usually get the money put in your account within a few weeks.
If you want to pay for those home improvements, but you don’t like any of the suggestions thus far; you might think about visiting your bank and asking to apply for an unsecured loan. Banks offer the best interest rates, and that is why you should use them instead of private lenders or small companies. You don’t risk losing your home because the loan is not backed by assets.
The bank will take a look at your accounts, your spending, and your income. They will then make an offer based on how much they think you can afford. Most people will struggle to get more than a few thousand pounds using that solution, and so it is not the best idea for those who want tens of thousands for significant home improvements. If one bank turns you down; there are plenty of others you can contact. You could even use comparison websites to save a lot of time and effort.
If you only need between £1,000 and £10,000 for your home improvements; you might think about covering the cost using credit cards. Presuming you do not have any credit card debt at the moment, and you have a decent credit history; most banks and private companies will fall over themselves to give you some plastic.
If you can clear the balance during the first twelve months of the arrangement; there is a chance you won’t have to pay any interest if you select the right deal. However, if you make minimum payments on a debt of around £10,000; you might end up spending around £200 per month but not clearing the debt for sixteen years. So, always pay more than the minimum amount, and only use credit cards for minor home improvements.
Now you know more about your finance options when it comes to raising some capital for home improvements; you should manage to find the best solution for you. As mentioned at the beginning of this post; nothing is wrong with using one or more of the options listed in this article. Just make sure you never accept any form of lending without first reading the small print and making sure you can keep up with the repayments.
Second charge mortgage specialists www.feasible.co.uk