If you need to pay for some expensive home improvements, you will find that you have a few different financing options.
One of the simplest and most convenient financing options for home improvement is to put it on a credit card, then take advantage of an interest-free balance transfer to move that money to another credit card, so that you can pay it off without having to pay a lot of interest. Of course, this option is only viable if you have a very good credit rating.
Other popular financing options for home improvement include low interest, unsecured loans, overdrafts, finance with the renovation company, and secured finance.
An overdraft is only really an option for smaller jobs – like getting a shower fitted – but it is not expensive, so a lot of people do like to opt for it.
Personal loans are a good option for people who have fairly good credit ratings and want to borrow for more expensive renovations. If you don’t have an amazing credit rating or don’t want to borrow from a mainstream lender, then borrowing from the company that will be doing the renovation work is also an option.
For very big jobs, however, you might want to look at a secured loan. Many people add the cost of renovation work to their mortgage. This makes sense in a way, because the renovation work will increase the value of the property, so you should not end up in negative equity. In addition, mortgages are very low interest.
It is important to note, however, that secured loans are a risk – if you do not keep up with the repayments then you could lose your home. So, only take out this kind of finance if you have a secure job and you are certain that you will be able to afford the repayments. Do not put your house at risk for frivolous expenses, or if you are already finding yourself living from paycheque to paycheque.
Shop around for the best prices for whatever home improvement you are interested in, and think about the long term value of it. Some improvements, such as double glazing, will pay for themselves quickly if you live in a cold climate. Other home improvements are a risk and could make it harder to sell your home in the future because not all buyers like them, and because they could make your home more expensive compared to other properties in your area. This is the sort of thing that you can find out about by talking to an estate agent – and it is well worth taking the time to do so if you are thinking about selling your home in the next few years.
If you are planning on staying in your property for a long time, however, then you may as well make whatever home improvements you think will suit you best, and that will make you happy – as long as you can afford them.