Renovating your home is a major undertaking, and one which – while all-but guaranteeing a better quality of life once complete – will likely have you tearing your hair out at every juncture. Sprucing up a property, whether you’re a first-time buyer looking to settle in or you’re looking to sell up and move on, is an undeniably stressful undertaking, and not in the least when it comes to money.
Indeed, money is a leading cause of mental strife amongst UK adults, in no small part due to recent economic events and their impacts on the average cost of living.
While property renovation and maintenance may have gotten a little harder to self-fund, this doesn’t mean that your refurb has to wait until your next pay rise. There is a key financial product available to you for use on precisely this kind of thing: the secured loan.
Understanding Secured Loans
Simply put, secured loans enable you to borrow money against something of value. This ‘something of value’ is typically your house; what with it being the most valuable thing you own, it can be used as a form of collateral against borrowing relatively large sums of money. The rationale here is that with a security in the form of your property, lending institutions are exposed to less risk in lending you the money, and hence can pass on benefits in the form of lower interest rates or longer repayment terms.
Of course, this does not mean that secured loans are free of risk. After all, placing your property up as collateral is a move with inherent risk, particularly if there are unknowns about your personal financial situation.
Assessing Your Financial Situation
This is why assessing your finances is an extremely important step before you step towards taking out a secured loan. Not only do you need to know the lay of the land with respect to your current finances, but you also need to have a decent idea of what your finances will look like for the foreseeable future. This is to ensure that you have the funds necessary to carry out the renovations you’d like to carry out, and that you have the resources necessary to guarantee making the minimum necessary repayments on the loan.
Some lenders may be less keen to lend to you depending on other factors, too – chief amongst which is your credit score. Checking your credit report will give you some idea of your viability, and making some timely transactions with a credit card can help boost it ahead of applying for a loan.
Budgeting Your Renovation
You should already have an idea of your projected renovation expenditure before you start looking for lenders, but this is the point where you really narrow down the costs. You should ensure you have a contingency built in for delays and additional material costs, too, else you could find yourself paying doubly for further works and for your existing debt.
