With Kirstie and Phil back on our screens in ‘Love it or List it’, it got us thinking about the advantages of improving your home instead of taking the leap to move house to get what you need.
Over the last few years, many families have gone down this route, especially due to rising house prices and the costs you have to fork out for when moving – stamp duty, conveyancing, removal firms – to name but a few.
But, it could be that by investing some money into your current home, you could get all the things you want without the upheaval of moving.
Whether it be improving the central heating, getting another bedroom, converting the loft or extending the downstairs space, it’s worth costing things up.
How to fund home improvements?
The best way to fund any home improvements would, of course, be from savings. If you’re not in a rush to get the improvements underway, consider how much you’d be able to save over the next few months/year. Get some quotes for the work you want to do and then get a plan in place.
You should also consider setting up a savings account where you can earn interest on the money you’re paying in. Find out more about what to look for when considering different savings accounts here.
If you’re needing to get underway with the work soon, but don’t have all the money saved up, it may be worth considering a home improvement loan or seeing if you could get a further advance from your mortgage lender.
What’s a home improvement loan?
It’s a type of unsecured personal loan, which means it’s not secured against any property or possessions.
The reason home improvement loans are slightly different to a standard personal loan, is because you’ll often be able to borrow more money for longer. So, in some instances you can borrow more than £25,000, which is usually the maximum for personal loans.
Because the repayment terms can also be longer than the standard one to five years, it can make things more affordable. Payments will also remain fixed throughout the term.
What’s a further advance?
If your home has increased in value since you bought it, you may be able to arrange to borrow more from your mortgage lender to fund home improvements. You can spread your payment over a long term and your interest rate should be lower than a home improvement loan, but you will need to check.
Steps to take before taking out a home improvement loan
Check your credit report and score
The type of loan and interest rate you’re offered will depend on your credit score and how you’ve managed credit before.
Through Noddle you can check your credit report and score for free, so it’s worth logging in or signing up so you can have a look through what a lender will see when they’re assessing your application.
Make sure you have a thorough check to make sure all the details are correct first of all, and then think about if there’s anything you could do to improve your score. Typically, the best interest rates will be offered to those with a good credit score, so it’s always worth working to maintain this.
See what you might be eligible for
Before submitting any applications, it’s best to check the likelihood of being accepted.
Use our loan matcher tool to do this. It’ll let you see what loans you might be eligible for and it’s free and secure. It also won’t leave a mark on your credit report.
Make sure you can afford to pay it back
This is really important, as you need to make sure you don’t overstretch yourself. Consider what your current outgoings are and see what more you can comfortably afford to pay out. If you can, have a plan to pay back the loan in as short amount of time as possible, as this will reduce the overall amount of interest you’re paying.