Improving your home can bring short and long-term benefits to property owners. Knowing you have a nicer or more spacious place to stay is often all the incentive some households need to undertake this style of project. Of course, if you can also add value to your home, you will benefit when the time comes to sell your property.
Of course, you need to consider how you will finance home improvements. The following guide examines ways to raise money for this type of work while looking at the advantages and disadvantages of each method.
Use cash to improve your home
If you have the money available to you, using cash to fund home improvement work makes sense and can speed up the process.
Advantages of using cash to improve your home
- You have the money right away
- There are no fees, charges or interest payments
- You don’t have to deal with banks or lending institutions
- You have a degree of freedom with how you progress with the work
Disadvantages of using cash to improve your home
- You might not have sufficient funds to pay for significant home improvement work
- You might leave yourself in case of emergencies
Use a credit card to improve your home
If you are unable or unwilling to use cash for home improvement work, paying by credit card is an option to consider.
Advantages of using a credit card to improve your home
- You can arrange funding quickly
- You might enjoy benefits associated with the card such as points or cashback
- If an issue arises with the work, you have more protection having paid by card
Disadvantages of using a credit card to improve your home
- Depending on the interest rate, you might pay a high price for the work
- You must have sufficient funds each month to make payments or you could face additional fees and charges
Using an unsecured loan for home improvements
This option is commonly the most popular solution to fund major improvement work, and you aren’t connection your assets to the loan. However, your credit score and finances will dictate what sort of loan you receive, if you get offered one at all.
Advantages of using an unsecured loan to improve your home
- You can arrange this money in a matter of days
- You don’t place your home or assets at risk
- Most people should be able to arrange an unsecured loan
Disadvantages of using an unsecured loan to improve your home
- You might have to pay high interest rates
- There isn’t much flexibility with this style of loan
Using a secured loan for home improvements
If you are willing to use your home or car as collateral, you can arrange a secured loan, which will often give you more funding to carry out work.
Advantages of using a secured loan to improve your home
- This style of loan often comes with a lower interest rate
- This style of loan is often paid back over a longer time-frame
Disadvantages of using a secured loan to improve your home
- It can take longer to arrange this type of mortgage as lenders review your suitability
- If you miss payments on this style of loan, your home or car will be at risk
Remortgaging for home improvements
As a homeowner, if you have a mortgage in place for your house, you can re mortgage it to pay for home improvements.
Advantages of remortgaging to improve your home
- You can utilise the equity of your home to improve your home
- You should be able to arrange an attractive interest rate
- You can consolidate debt payments together by remortgaging your home
Disadvantages of remortgaging to improve your home
- You will likely extend the period of your mortgage
- The remortgaging process can take some time
- There will likely be remortgaging fees to consider
- Your home is at risk if you cannot meet the payments
How to explore your home improvement finance options with The Money Hub
The benefits of home improvements appeal to many households, which is why so many people are keen to carry out this work. Of course, you need to ensure you find the best finance solution to pay for the work. We can help you review your options.
Call The Moneyhub Limited on 0203 725 5830 and speak to one of our highly specialised and dedicated Mortgage Advisors or you can complete an enquiry form which will allow you to schedule a call time.
DISCLAIMER: These articles are for information only and should not be construed as advice. You should always seek advice prior to taking any action.