Paying for home improvements

Smaller home improvements like re-painting or tiling cost relatively little but can have a dramatic effect on your home. And the costs involved should be relatively small and affordable.

But what do you when the improvement is going to cost a little more?

Whilst you should always use credit cards sensibly and never borrow more than you can repay, a 0% credit card could make paying up front for something like decorating or gardening materials easier.

And if the project is even larger, then a personal loan might make more sense.

Sainsbury’s Finance reported one in five of it’s loans, in the first half of last year, were to fund home improvement projects with the average loan amount being £9,225.

If you’re planning on borrowing in such a way, to pay for a home improvement to add value to your property prior to a sale, then bear in mind that some loans may carry an early redemption penalty.

Many home improvement companies themselves will be able to offer their own credit facilities but it’s always worth shopping around for the best or right deal for you and your circumstances.

Finally re-negotiating your mortgage with your present lender for funds for larger projects may be the way to go, but as Money Supermarket points out, consumers should be wary of upsetting the balance of equity in their property, which could make re-mortgaging or changing lenders later on difficult.

Of course, as with a secured loan, you need to think very carefully before taking on such a debt as your home could be at risk.

photo credit: hakan dahlstrom

Note: This article first appeared in our homeowner newsletter dated 4th April 2011. Click here to read the full newsletter.

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