Considering a Home Improvement Loan

Information on Borrowing Money for Home Improvements

There are many options available to homeowners who would like to raise cash for a home improvement projects such as installing double glazing – There are many lenders and thousands of products to choose from.

Below gives some information on the options available such as using a credit card, differences between a secured and an unsecured loan and also remortgaging.

Unsecured Loans & Credit Cards

These options can offer a quick route to funds, but can prove to be very expensive. Acceptance is usually decided on the result of a credit score which is based on such things as your employment status, income and credit history.

If considering an unsecured loan, the maximum period is normally 5 years (60 months). This would mean your monthly payments could be quite high compared to a secured loan or mortgage where you will be able to spread your payments over a far longer period of time.

There are excellent deals available if you are prepared to shop around, but generally the interest rate you pay is higher than mortgages and secured loans. By their very nature, these forms of credit involve the lender taking more risk – which is why the interest rate is increased.

These types of lenders tend to have little or no tolerance of late payments. They are very quick to take legal action to recover missed payments and in such cases will usually demand repayment of the full amount borrowed, plus interest, along with legal costs incurred.

If you can’t get more money from your bank or building society, there are loan providers willing to advance the funding you seek. Some home improvement deals may involve money being released to you in stages throughout the term of the home improvement project. The final cost may be different from the budgeted amount so its best to ensure you only borrow the money you need.

Other options such as Secured Loans

A secured loan is secured against your home as a second charge behind your mortgage lender, the loan rate rates are lower than unsecured forms of credit – because the lender has an interest in your property.

A secured loan gives you a lot more flexibility on the repayment term – you can spread your payments over 5-25 years, and in some case, up to 30 years. This results in low monthly payments. One of the main differences between secured and unsecured loans is the amount you are able to borrow – with secured loans; lenders can advance up to £250,000, and sometimes more.

To secure a loan against your property it’s not necessary to own your home outright, just sufficient equity to cover the amount that you are looking to borrow. As secured loans give lenders a degree of safety, in the event of difficulties with borrowers meeting the monthly repayments, a lender will usually take a long-term view and allow some leeway, knowing the property is there as collateral.

The most important factors when applying for a secured loan is the available equity in your property and your ability to meet the repayments.

Secured loans give many tens of thousands of people the opportunity to borrow money, people who may be turned down by more traditional providers and sources of funding.

Considering Remortgages

A remortgage gives you the opportunity to pay off your existing mortgage, and by taking advantage of the available equity in your home, you could raise additional cash for home improvements, debt consolidation or any other reason.

The advantage with this form of finance is you only have the one monthly payment to make – and that’s your mortgage! With competitive interest rates, you could even be better off each month!

There are thousands of mortgage products on the market to cater for all circumstances. Choose from interest only, variable rate, tracker, fixed rate, capped, discounted, cash back and so on, but be sure to take advice from a regulated mortgage advisor to give you all the information you need before making a decision.

One of the major benefits of a remortgage is that depending on the lender, your credit history, employment status and income are no major factors when it comes to approving your application. What is important is the available equity in your property and your ability to meet the repayments every month. Ideal for the double glazing installation you might have been considering!

If you wish to receive information on installing double glazing along with information on financing it, then please click here to visit our request form.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A/YOUR MORTGAGE OR ANY OTHER DEBTS SECURED ON IT.

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