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looking to improve your home, it’s important that you choose the right finance products to fund your renovations.In this guide, we will break down the products available, when they should be used and how to get the best deal.
What products can be used to fund home improvements?
The best profits to fund home improvements are the following:
Remortgages
A remortgage is simply the act of switching your mortgage from one mortgage lender to another. During this process, you can raise the additional funds needed to undertake your home improvements.
A remortgage is a strong option for borrowers who are out of their promotional rate period and any associated early repayment charges.
Remortgaging is a very popular option as a mortgage can be taken over a long period of time and come with lower interest rates than unsecured lending.
Homeowner loans
Homeowner loans are another form of secured loan, like a remortgage. Unlike mortgages, homeowner loans are taken out alongside your existing mortgage, meaning you can take out a homeowner loan without having to repay your mortgage.
Again, homeowner loans can be taken over a long term (usually up to 30 years) and come with low interest rates, making them a great option for those looking to finance home renovations.
To get the deal, its important that you use a homeowner loan broker, as they will help you to compare options from multiple lenders quickly.
When looking for a broker, be wary of high broker fees, which can quickly add significant cost to the cost of your loan.
Personal loans
Personal loans are a quick and easy way to raise finance and unlike the first two options are a type of unsecured loan, meaning they are available to non-homeowners.
Personal loans have the advantage of being quick to arrange, with funds usually being available in around 3-7 days.
The main disadvantage of personal loans is is that they come with higher interest rates than homeowner loans and the loan term is usually restricted to a maximum of 7 years.
Online comparison systems are the simplest way to find the best personal loan deal. The fees charged on personal loans tend to be low, so the lowest interest rate will often be the best deal (although you should always check).
0% credit cards
Credit cards are a strong option for borrowers who need the funds for a short period of time, or a very small amount of money.
Where possible, choose a product with a promotional 0% interest rate, ideally for a long period of time.
The simplest way to find the best deal is to use online comparison tools to quickly compare options from multiple lenders.
How to choose the right product for you
When it comes to choosing the best product, the first step is to consider whether you’re looking for secured or unsecured finance.
For secured products, a reputable mortgage, or secured loan broker will be able to help you choose between homeowner loans and a remortgage.
As mentioned earlier, a simple online comparison site, such as MoneySuperMarket or Go Compare is the quickest and simplest way to get the best deal.
It’s important that you consider your options before applying to ensure you have the best product for your needs.
