Are you planning on improving your home? Do you see the average prices and worry about where you can find the money?
Did you know, between the years of 2017 and 2019, homeowners spent a massive $522 billion? This price has come from an estimate of 155 million projects.
These days, improving your home can cost a lot of money. Finding this sum can be worrying, but there are ways to find it.
Need to know how to pay for home improvements? Then check out this article to learn all about financing your project today!
What Is Involved in Home Improvements
Home improvement is exactly how it sounds. It is improving your home in many different ways. These improvements can be anything from fixing your plumbing to a complete renovation.
Unfortunately, every improvement will cost. The primary thing you should consider is why you are undergoing home improvements and what you will be doing.
If you are thinking about how to know if my home needs renovation, you will need to check over your entire home. Check over every inch of your home, looking in all the hard-to-miss places. Once you have finished, you may, unfortunately, have found a few problems dotted around.
These problems could be things such as a leaking roof. Or you could find specific sections of the floor that need replacing. You may even notice some patches of paint are starting to chip. These are easily fixed and usually for not a massive amount of money.
Yet, if you wonder how to make my house worth more, you will be looking at a higher price range. Your idea of home improvement may be to upgrade your house as opposed to fixing it. This could be the option to sell it on for more money or feel your home is a bit outdated.
How to Pay For Home Improvements
Now you have an idea of why you wish to improve your home and a rough estimate of what you will need to buy to do so. Searching the shops or online for the equipment you need will give you an idea of how much each part will cost.
Deciding where to find all the money is now your main priority. There are many different routes for you to choose from when making your decision. You need to pick the right one for you.
We will cover a few below and try and offer advice on which route you should choose.
Use Your Savings
Most people will have a savings pot set aside for that rainy day. Well, if you are renovating your home, let us assume it is pouring down with rain.
Search that savings pot and decide how much of it you wish to use on your renovations. Is it enough to cover all you want it to or just a small section?
Either way, this would be by far the easiest method to use. If you already have the money, you won’t have to worry about incurring extra charges.
If you have enough savings to spend on home improvement, it is a solid option to use it.
Refinance Your Mortgage
Refinancing your mortgage is another option you could choose. Refinancing or remortgaging is where a homeowner can borrow money against their home.
You could also choose the option to change your mortgage provider. By changing, you could potentially get a better deal on the rate for your mortgage.
I would recommend researching different mortgage providers. Take into account the interest each one will be asking for. If you cannot afford the monthly repayments, I would not recommend this option.
If you are unsure how to refinance your mortgage, follow this link for more information.
Releasing Your Equity
Having equity in your home is where you own a part of your property. If you borrowed money to buy your home, whoever you borrowed the money from, will have an interest in your house. This interest slowly goes down as you pay it off.
The more of the mortgage you pay off, the higher your equity is. Basically, this means the longer you live in your home, the more of it you own.
To release the equity from your home, you have to own the property and be aged 55 or over. You can do this by using a lifetime mortgage.
A lifetime mortgage is essentially borrowing money that is paid back at a later date. This payment could be from the sale of the house after you die. Or if you move into a place such as a care home they.
One downside to this option is, it will deplete the amount of inheritance you could leave to your loved ones. If you don’t want this to be the case, then this option is not for you.
Financing Your Trades
Have you ever looked at buying a new car but found you didn’t have the whole amount of money for at the time? Were you offered the car on finance where you could pay it off monthly with an extra charge?
This can be done when improving your home as well. Some places call it handyman financing.
This option is perfect for someone wanting to spread out their payments. Essentially you will use the services provided and agree on a repayment plan. These payments can be spread across a few months to a few years.
As mentioned in the refinancing your mortgage section, there may be extra charges. So be sure you won’t fall behind on the repayments before agreeing to the financing.
Use Your Credit Cards
Credit cards could definitely be a viable option. They work like financing, where you pay for a product or service and pay it off over time. This could be your perfect option if you want to spread the costs.
Different credit cards will have different packages. Some may offer a 0% purchase deal. This is where you pay for the product and the balance off over time without paying any interest.
Check what the credit card limit is before acquiring it. If the limit is lower than what you want to buy, you won’t be able to pay for it.
Research and choose the perfect credit card for what you are looking for.
Look Into Taking Out Loans
A loan is like a mortgage but without a house. You can take a trip to your bank and ask to borrow a lump sum of money. If they agree, then you will pay back this money over time with a specified level of interest added on top.
Some loans will come with a low percent interest rate compared to others. So researching different loans is recommended.
Again this is perfect for those who wish to spread out the costs for their home improvement. If you choose this option on how to pay for home improvements, make sure you can afford the monthly payments.
Apply For a Home Improvement Loan
Some loans are designed specifically for home improvement. This option could be a better choice for you than a standard loan.
A home improvement loan allows you to borrow money to renovate your house. You will have the chance to get a much higher loan by securing it against your home. A secure home improvement loan could get you as much as $100,000.
You don’t have to put up your home as an asset. You can do an unsecured home improvement loan. But, the total amount will drop to around $6,000 to $10,000
What Is Required for a Home Improvement Loan?
Unfortunately, home improvement loans aren’t for everybody. You will need to hit specific criteria to qualify for it.
As with any loan, you will need to provide your income and your outgoing payments. They will also need to check your credit history and credit score. If the loan company feels safe that you can afford the repayments, they will move forwards to the next stage.
With a home improvement loan, you will have to work out how much equity you have in the home. The lender will also ask a contractor to estimate how much your home improvements are going to cost.
This may be a great way to gather the funds for your home improvements. But it also is another form out outgoing to add on top of what you already have.
Improve Your Home
Now you have a few more ideas on how to pay for home improvements. It is now up to you to decide which you are going to choose.
Will you take out a simple loan? Will you use your credit cards to buy your equipment? Is your best option to go through a handyman financing scheme?
You will need to think about each option and decide which one you will be able to afford.
Contact us to request an estimate for your handyman financing.