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Home Improvement Loans

Many families will at some point out grow their current home and require more space, the options available come down to three main approaches – to move home, to extend or to convert the loft if possible. If you are happy in your current location, then moving can be ruled out, which does save you from the hassles and costs involved in finding a suitable new home and actually making the move. This leaves you with the two home improvement options, and whichever you opt for you are likely to require some form of loan to cover the costs involved.

A personal loan could provide the money necessary to carry out the home improvements that you want. When taking out a personal loan you will need to decided if you want to secure the loan against your home (if you are a homeowner) or if you wish to have an unsecured loan. The main difference is that the secured option tends to offer lower interest rates, which makes it a popular choice. If you are looking to borrow a large amount, which exceeds the limits of unsecured loans then this will be your only option in terms of a personal loan.

There are other financing options available to you besides personal loans if you are a homeowner. Remortgaging to release some of the equity that you have in your home is a good option as it provides the money at a low rate and can give you access to large sums of money.

The way the remortgaging approach works is simple, providing you do not have a 100% mortgage (i.e. you have paid off at least some of your mortgage) then you have what is referred to as equity. This is in simple terms the value in your house that you actually own, so it is in effect the market value minus any outstanding mortgage or other loans secured against it. Remortgaging either increases your current mortgage or takes a new one that is for a larger amount. For example if a home is worth £100,000, with an outstanding mortgage of £60,000 then the equity would be £40,000. Remortgaging to the tune of £80,000 would give the borrower £20k leaving an equal amount of equity in the home.

All of this may seem a bit complicated, but the bottom line is that such an approach will give you the money at an interest rate and repayment term equal to that of your mortgage, which is a good option in many cases.

Whatever type of home improvement you have in mind, from major structural work to a new kitchen or just redecoration then there are a number of financial options available to you, from specific home improvement loans through to the equity release options for homeowners.

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