Should You Take Out A Secured Loan To Improve Your Home?
Flickr At: Jennifer C
One of the quickest ways to get money for home improvements such as an extension, new conservatory or new roof is to take out a loan. Providing your finances are in a healthy state, you have a good credit score, and the project isn’t too big there shouldn’t be a problem. However, if you don’t want to increase the amount on your mortgage, not every lender will pay out, is it worth looking at a secured loan in order to get that dream family kitchen, extra bedroom or a new bathroom?
Will It Increase The Property’s Value?
This will be the number one question on a lender’s lips as depending on how much money you put into the property; you could increase the value of your house by a good few thousand dollars. Many buyers prefer to put their own stamp on a new home but if you choose to build an outdoor patio, infinity pool or even a wet room they’ll jump at the chance of owning something with a unique, modern feature. However, if you’re only looking to update the décor, it may be worth finding the money from elsewhere as it’ll be ripped down to make way for the new owner’s tastes, style, and ideas when they move in. Before you begin to make changes, or indeed before you apply for a secured loan itself it may be worth having a local real estate agent come to the property to value it in its current state.
Flickr At: andrewarchy
Do You Need The Money ASAP?
If you’re eligible for a secured loan the lender will release the funds, per the usual checks, in a timely manner which leaves you free to get on with your project. Some second charged secured loans have fees attached which are payable from the moment you take one out while other fees are simply added to your monthly payments. Make sure you carefully check the terms and conditions of your loan as a secured loan uses your home as collateral, and you’ll want to ensure that the money is always available for payments. Secured personal loans are seen as the better option, especially for home improvements, as it means that the lender sees the loan as a low-risk option because of the property, or another significant asset that’s been used against it.
Flickr At: Granit Chartered Architects
Are You Looking To Sell Soon?
Some people like to do their home up when they are trying to sell the property which can either help or hinder when looking for offers. Consider undertaking only superficial decorating projects, unless you plan on living in the property for a long time to come. Decide how much money you want to spend on indoor and outdoor projects or if it’s a building project look over the budget before you start. Costs can spiral quickly, and the last thing you want is to run out of money early, or have to return to the lender and ask for a larger amount. This could delay the entire build as well change the terms and conditions of the new loan, not too mention push the monthly repayments even higher.
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