How to Raise Money for Home Improvements
There are lots of ways to improve a home, such as remodeling a bathroom or kitchen, adding a conservatory or an extra bedroom, but even upgrading appliances, new furniture, or updating interior design can make a huge difference. Nearly every homeowner has a list of improvements that they want to make to their property. However, alongside a shortage of free time, the biggest obstacle is a lack of funds. Whether you are planning to sell your home and want to increase its value, make it more energy-efficient, or you need more living space and/or want to improve your quality of life, here are some ways to raise money for home improvements.
Reduce your household budget
Often the biggest savings can be made by reducing all your normal monthly outgoings by a little, rather than cutting back on certain costs completely. Perhaps you could walk to the local shop rather than driving each week, reduce your weekly takeout to once a month, cut back on your electricity usage, and find cheaper alternatives for your usual groceries. Another potential tactic is to look for coupons and discounts like a Giant Food sales circular.
Dip into your savings
If you have savings and/or spare cash in your current account, this is the most straightforward way to fund home improvements. In some cases, using savings to improve your home could prove a better investment as it could add as much as 10% to the property’s value. Using cash also means you will not have to repay a lender or pay interest and can complete the work on your own schedule. Of course, many people do not have enough money in their savings to fund significant home improvements, and it is rarely wise to use up all your savings in case of an unexpected financial emergency.
A credit card can help with home improvements, but not necessarily for expensive projects as they often have high interest rates. Some credit cards offer interest-free periods meaning that if you have repaid the total amount by the end of the period you will not pay additional interest. Each month, you will need to repay at least a minimum payment or risk late charges, and it is better to pay more than the minimum amount when possible.
Take out a loan
An unsecured personal loan is a popular choice for homeowners looking to improve their homes. Because they are unsecured, none of your assets are at risk if you default, but they tend to have higher interest rates than secured loans. You take out a set amount of money and make affordable monthly repayments that cover both your original loan amount and some interest. Personal loans can be taken out on a long or short-term basis.
A secured loan is the type of loan given by a bank, is usually of higher value, can be repaid over a longer timescale, and offers lower interest rates. However, your assets, such as your home or car, could be at risk should you default on the loan.
Remortgage your home
If you want to make significant improvements to your home, such as a total renovation, you might consider remortgaging your home. This can be a difficult route as you will need to jump through several hoops to secure a new mortgage, but if you are successful, you could end up with a more favorable mortgage arrangement. Of course, if you do not keep up your repayments, you could lose your home.