After living many years in the home, if you are witnessing any of the issues like roof leakage, damps and moulds on walls, the floors have started to detach, termites infestation, wall paints getting faded, then it’s time that you need home renovation. Well, these are the most obvious signs and there could be others as well, but the key point here is to identify those signs and make a plan to get the work started to improve the house as soon as possible.
It is important to know that home renovation don’t come cheap and you cannot fix the number how much actually it will cost. It is quite common that people have to pay more at the end due to any unplanned work on their house. Thus, it is important to have the fund ready from the start and also make sure to include some extra amount in your budget. Now, the main question arises here is how much finance your home improvement project needs? Well, the answer to your question lies here in this blog where we have mentioned different ways that you can follow to pay for your home renovation. So let us get started.
How to pay up the cost of your home improvement
- Use your savings
The first and also one of the best options to pay up for home improvements is to use the savings. It makes more sense to use the savings for your home rather than using to finance the holiday vacation. This is because spending on home renovations is just like an investment where you will get good returns when you will sell your house in the future. So, the better the condition will be of your home, the higher will be its sale value. Other than that, with the savings, you won’t have to borrow from someone where you will have to pay the interest that could get accumulated if delayed in paying the loan.
- Go for lending solutions
There is no doubt that savings are extremely helpful, but if the budget that you have set for your home improvement project is more than what you have saved, then it is better to go for short term loans. There are many lenders in the market who provide guaranteed loans just as the form of payday loans. These loans require very less paperwork for approval and you can get the money in your account within a few hours of approval. This can be really beneficial where you need to spend more time on your preparing for home improvement rather than standing in a long queue of crowds at banks.
- Credit card is not a bad idea
If you are planning to borrow for the home improvement, then a credit card can be a good option. But you have to use it carefully and make sure that the credit limit of the card given is enough to cover the expense. However, there is also one great advantage of using a credit card is that if in case, the work done is faulty or not properly done, then you will have the liberty to claim your money back from the card provider. But this is applicable only when the bills of the renovation are in between £100 and £50,000 (approximately) and you will be receiving the amount under the norms and regulations of Consumer Credit Act or the Consumer Credit Directive. This option is really useful when you don’t have any savings or you have kept it for other purposes.
- Home equity loan
Applying for a home equity loan is another great way to fund home renovations. Going for a loan against the equity of your own home is an option that you too can consider. If your project is quite big where you will need large money, then this option may be the right choice. Other than that, as you are providing security so you will also be offered a low-interest rate as compared to that offered in credit cards and other types of loans. However, regularly using equity will cause a significant fall in the reselling value of your home. Other than that, on getting a huge sum of money, people are tempted to spend on things that are not related to home renovations.
- Using overdraft
This is the option that many people choose in order to finance their home improvement project. Overdraft is just like using a credit card, but the only advantage is that if you use the amount of money which you actually need rather than taking a big loan. In overdraft, there are no fixed repayment options and you will have to pay back only the amount which you used.
Bonus tip: Further, if your credit score is not good and you are having difficulty in getting other loans from banks and credit unions, then the best option is to go for very bad credit loans with no guarantor from direct lenders who can approve the loan easily. However, they may ask to provide something as collateral and may consider your source of income.
Wrapping up, so these were the options to use to fund your home renovations. You can go with any one of them that suit your requirement. Best of luck!