Today lets take a look at easy ways to raise money for home improvements
High mortgage rates and living costs determine most homeowners to postpone home improvement works indefinitely. Whether it’s new paintwork or remodelling your kitchen, finding the funds could be daunting. You don’t have to be super-rich to afford improving your home, though.
Easy Ways to Raise Money for Home Improvements
No matter what renovations you want to make, here are a few easy ways to raise money for home improvements.
Build Up a Savings Pot
Financial experts agree that the cleanest way to fund your home improvement project is with your own cash. Considering that home improvements can raise the value of your property with over 10%, saving money and investing them into your home could be profitable in the long run.
While saving money could be challenging, you could build up a saving pot or open a savings account for the purpose. Set a budget for the project and timeframe to gather the funds you need. Funding your project with your own savings may take some time, but it also gives you the freedom to carry on with the work at your own pace. Furthermore, you won’t have to pay fees, charges, or interest.
Use a Credit Card
If you don’t have cash but only need a small amount to fund your project, credit cards offer quick and easy access to money. Most banks give credit cards to their clients, and depending on the financial institution, you will either have to pay back the amount at the end of the month or in monthly instalments.
Even though credit cards come with associated annual costs, they help you build a credit score and will undoubtedly cost you less than an actual loan.
If you need more than a credit card allowance but less than £50,000 to fund your home improvement project, an unsecured loan could be the right funding solution for you. Unlike secured loans, these types of loans are not connected to your collateral, meaning the lender won’t be able to touch your assets in case of loan default.
You will need an impeccable credit report and steady income to access an unsecured loan, and you might also have to pay higher interest rates. On the bright side, unsecured loans are usually easy to access and give you cash for most purposes.
The opposite of unsecured loans, secured loans are linked to collateral, typically your car or home. They come with more flexible interest rates, but your assets are at risk if you default the loan. In many cases, the bank becomes the legal owner of the collateral if you can’t repay the debt.
More often than not, secured loans give you quick access to up to £100,000 and even the possibility to renegotiate instalments if need be without facing a fine.
Remortgaging for Home Improvements
Homeowners who need to borrow large amounts may find a remortgage for home improvements more than useful. You can use the new mortgage to run a full renovation project or to build an extension to your home.
You could get cash in excess of £200,000, depending on the equity in your home; the only issue is that remortgaging could be tricky. Sometimes, you may have to make early repayments towards your original mortgage, which could be expensive. However, some lenders also give you the possibility to consolidate all debts into a single monthly payment; so, whether a remortgage is worth or not the trouble is ultimately your call.
Raising money for home improvements may be tricky, and all solutions come with pros and cons. The best way to choose the right one for you is to analyse your circumstances and avoid getting debt you can’t afford so that you can carry out the renovation works you’re dreaming about.
Easy Ways to Raise Money for Home Improvements is a feature post