How to fund your home improvements

How to fund your home improvements

As housing prices increase, studies show that more than half of 1,250 homeowners prefer to undertake home improvements rather than move.

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Renovations don’t just benefit the homeowner’s quality of life; they can also increase the value of your property if you choose the right improvements.

Whether you’re looking to make your home more attractive or increase the value, home improvements aren’t necessarily cheap, and homeowners may need to take out a loan or release equity from their property in order to make their home improvements.

Ensure you always speak to a personal financial advisor such as before taking out a loan or equity release.

Credit Card

The simplest way to finance smaller home improvements could be putting the value on a credit card. Many providers offer 0% interest for the first six months, but be sure to make any repayments before an offer finishes to avoid potentially expensive fees!

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If your planned renovations are too much for a credit card purchase, you could consider taking out a home improvement loan. These loans are most appropriate for values between £7,500 and £15,000, and standard credit checks will need to be undertaken before you will be approved for a loan.

Equity Release

For homeowners aged 55 or over, equity release may be an option. This is the process whereby you unlock part of the value of your property to have as cash rather than equity tied up in the property.

This contrasts to a normal loan because rather than repaying the loan monthly, the loan and interest are only repayable once the homeowner passes away or moves into a care home.

To give you an idea of the returns you could make from equity release Chippenham property prices are an average of £266,317, according to Rightmove. You could use an equity release plan to access a tax-free portion of this value, giving you the cash you need while remaining in your own home.

The most popular type of equity release scheme is drawdown, allowing you to release cash when you choose and reducing the amount of interest payable overall.

It’s even possible to release equity from a property still under mortgage, but you will need to use some of the released equity to repay the remainder of your mortgage first.

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