Having decided to make that home improvement many people face the problem of how to finance it. If you have savings, that's all well and good, but generally you will need to borrow some money. The home improvement loan may be the answer, as lenders see a home improvement loan as an extension on your mortgage. So your mortgage lender should be the first place you turn to for this kind of loan because you should be able to borrow the money at their standard variable rate.
The loan will also be a secured loan meaning a lower rate of interest anyway. If you don't receive your mortgage rate you should still be able to negotiate a good loan rate.
If you can't get more money from your mortgage lender, then some other loan providers will offer special home improvement deals. These deals may feature money being advanced to you in stages, which take account of the amount of work completed. The final cost could well be more or even less than you originally budgeted for, so being able to borrow only the money you actually need is important.
Home improvement loans are usually secured on property like your mortgage, but can be unsecured if you are not a homeowner.
You can use these loans to improve your home and are usually for larger loan amounts (from £5000 upwards).
The repayment periods for home improvement loans are longer (up to a maximum of 25 years depending on loan size and affordability).
Some lenders only provide home improvement loans to fund essential improvements. Not for most extension work, unless you can show that it is essential. Should your work not be essential then you may have to ask instead for an extension on your mortgage
Please note these articles do not constitute regulated financial advice, which recommends a course of action based upon the specifics of your personal circumstances. These articles are intended to provide general personal financial information. We urge you to consult an Independent Financial Adviser (IFA) before making any important decisions about your finances.
YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOAN SECURED ON IT