What is the Best Loan to Help with Home improvements?
Do you need money to help with home improvements? If so, you're in luck. Lenders throughout Great Britain offer secured loans that you can use to finance the home improvements you are looking to do. You can obtain tens of thousands of pounds based on the equity in your property and your credit history. Secured loans are usually affordable and fairly easy to get.
You can use a secured loan to add a conservatory or increase bedroom size. You can renovate your kitchen and update your bathrooms. You can even use the money to replace your roof, upgrade your windows, or replace the flooring throughout. It's all up to you. Nevertheless, before you can start spending, you have to get the right loan for your circumstances.
Start with a Budget
The right home loan is one you can afford to pay back without putting too much stress on your budget. Therefore, if you do not have a budget in place, establishing one is your first step. Keep in mind that a budget is just a framework that acts as a guide for your spending. It is not set in stone.
A budget tells you how much money you are taking in versus how much you are spending. It will also help you see if, and how, you are spending unnecessarily. You need to make sure you can actually afford to repay a secured home loan before you apply for one. Why? Because if you default on your loan, you could very easily lose your house.
How Much to Borrow
Home improvement finance through a secured loan requires that you use your home as collateral. Lenders will look at how much equity you have, combining it with your credit rating and their own loan-to-value (LTV) ratio to determine how much you're eligible to borrow. You can get a head start by calculating your equity beforehand.
Equity is the difference between how much you owe on your mortgage and what your property is worth on the open market. It is easy to calculate; just subtract the outstanding balance of your mortgage from the retail value of your home. The resulting number is your equity. This is the maximum amount of money you will be able to borrow on a single loan.
We say 'maximum' because you may only be able to borrow less. Let's just say your lender offers a 75% LTV ratio. That means you can only borrow 75% of your total equity. A 75% loan against £50,000 in equity would work out to £37,500.
It is very tempting just to call your own bank and take whatever deal it offers. After all, you already know your bank and the people that work there. However, take it from us when we say it is better for you to shop around. Your bank might offer the best deal, but you would never know if you did not look elsewhere.
Unfortunately, there is no way to know the terms and rates of a final offer until you actually apply. Nonetheless, using our whole of market comparison tables you can compare advertised rates and terms among lenders to get a good idea of which ones are most likely to offer the best deal. Having said that, you should only apply for one loan at a time. If you apply for multiple loans simultaneously, it could hurt your credit rating and prevent you from getting good rates and terms.
You can get help with home improvements by applying for a secured home loan with one of our top secured loan lenders. Secured loans let you borrow substantial amounts of money over flexible repayment periods, usually with low costs attached. A secured home loan is one of the most powerful financial tools you have at your disposal. Take advantage of it now to finance those much-needed home improvements.
For expert help and advice on getting the best loan to suit your individual needs please don’t hesitate to call our team of experts. There is no charge for our advice and our experts will use their knowledge of the market to find the best loan options available. They can help you from comparison to application ensuring the loan and lender you chose is right for you. They will also ensure that you are fully aware of any charges that will occur before you commit to proceed with any offer.
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