Secured Loans for Improving Your Home

House Extension

Finding lump sums of cash out of your own pocket is not so easy for all of us and while we all like to improve our homes it can be tricky to find the financial means.

A good remedy to finding the extra cash can be to acquire a secured loan.

This involves securing the loan against an asset, normally your home or perhaps another property. The advantage of taking a secured loan rather than an unsecured one is that you can achieve lower rates of interest; this is because the home is collateral, and if you miss payments then the lender has a right to put a claim for your home as repayment. This is the reason why people are often perturbed from taking secured loans, however if you do come into financial difficulty and find you are temporarily unable to make payments most lenders will provide some leeway as they still have the overall option of the equity in your home.

Secured loans are common for securing relatively large amounts of money (usually over 5,000) over longer periods of time (up to 25 years). It is not always required that you own your home outright to obtain a secured loan though often you will have to have enough equity equal to or above the amount you want to borrow.

There are many home improvements which people normally apply for loans for so you are far from alone and lenders are well accustomed to lending money for the purpose of home improvements. These include conservatories, kitchens, bathrooms, loft conversions, double glazing, extensions, and garage or porch construction. People may also borrow money to build leisure facilities at their home such as swimming pools, hot tubs or saunas; what ever improvement you have planned it is extremely likely that it will push up the value of your home.

It is important to choose the right home improvements for your home and have them completed to a high standard. If you are new to DIY then you should be cautious and read up carefully as sub-standard DIY jobs can have a negative impact on the value of your home. As a general rule you should invest in home improvements to improve your own living space to make your home more comfortable to live in rather than to increase its value, although it is likely that the improvements you do make if completed to the right standard will increase the value of your home.

According to estate agents the top home improvements that are most likely to add value to your home are extra bathrooms (+5%), loft conversions (+10%), replacement and adding central heating can add value to your home and save you money through more efficient central heating. The home improvements that can have a negative impact of the value of you property are usually fishponds, plastic double glazing, and concreting your garden to provide off-road parking (unless you have the space to put it at the side of your property); these might not cause the value of your home to decrease but you may not see a return on your investment. Often some of the simplest improvements can add value to your home; for instance if done tastefully the right paint job can add 10% to the value of your home.

When shopping for a secured loan you should compare rates between plenty of lenders, seek out the best rates from high street lenders versus internet or telephone based lenders to get the best to deal. If you are ever in doubt always seek sound professional financial advice.

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