Flexible Finance Options - Buy Now Pay Later (6 months Deferred Payments)Find Out More
With the new year fast approaching, there’s never been a better time to turn your attention to improving your home. Such upgrades will naturally vary in terms of time and cost, with the latter often proving a sticking point when seeking out improvements for your property. Fortunately, there are a vast number of different ways in which home improvements, both big and small, can be financed. We’ve put together this handy guide to highlight the different ways of financing your next home improvement project.
Here at Stormclad, we offer several finance options to help our products to be more affordable and accessible to homeowners. We have four different finance options so there is something to suit everyone’s financial situation. They are as follows:
If you are paying from your own funds by cheque, debit card, bank transfer, or cash. If you are arranging your own funding via a loan or re-mortgage.
5.9% APR representative fixed. Spread the cost of your purchase via a fixed monthly payment. You have the option to make additional repayments at any time to reduce the cost of interest and reduce the term.
You can defer the payment for 12 months after which you have the choice to settle interest free by paying the full amount borrowed. Alternatively, after 12 months you can repay by monthly instalments at 9.9% APR representative fixed. However, if you do not settle by the end of the 12-month deferred period, interest will have accrued from the inception of the loan agreement.
Spread the total cost with a fixed monthly payment over 24 months with no interest.
The options shown above outline the potential payment options that are open to you Please visit our finance page for full details and example illustrations of quotes.
Another viable option to pursue is to remortgage to help pay for home improvements. Remortgaging is usually needed after your initial fixed-rate deal, usually two or five years, comes to an end and looking to remortgage while you are still in the middle of your deal will lead to potentially expensive charges.
When it gets to the point that you need or want to remortgage, home improvements are something that you may be able to gain an extra sum for when you switch your deal. If you are wanting a bigger amount of money to borrow, making use of any equity that you have acquired through your first few years of repayments can be especially useful. The more equity you own in your property, then the easier it could be to be able to secure more funds.
Moreover, if your property has increased in its value since the time of purchase, then the likelihood of getting a better deal when you remortgage increases. It is likely that you would have to take on a bigger loan than your original mortgage in order to be able take advantage of those extra funds, so it is important that you are able to budget for those larger future mortgage repayments.
However, if you were to have a higher LTV (loan to value) mortgage, then your initial repayments may not have been enough to build up an amount of equity to put you in a solid position. It might prove to be a bit more of a struggle to borrow more money when you remortgage, or you could face a higher, more expensive rate. Also, while the initial aim of securing the remortgage may be more short-term, stretching the debts to a longer period will likely increase the costs further down the line, as well as the longer time in general it takes to complete the remortgage.
One straightforward way to help finance home improvements would be to use your own money. Money in the bank, most likely in some sort of savings account, will allow more of a free reign when it comes to any deadlines on spending and projects. Ideally, however, you want to keep cash funds available in case of any emergencies that crop up, such as an unexpected car repair. It would be a good idea to take the time necessary to figure out a detailed and planned budget for your home improvement plans.
Unless stipulated by the conditions of your account, it is likely that you will not have to face any charges or interest in order to access your funds, as well as the fact that you will not owe anything after you have spent the money.
One other popular way used to fund improvements for a property is by using a credit card, which has several positives. In particular, if a smaller project is being undertaken then a credit card can be ideal in helping provide quick and easy funds. Larger projects may well cost more than imagined, so it is important to be able to commit to having work done in the knowledge that there is enough money in the bank to comfortably pay, as well as some in reserve.
There are a number of 0% deals on credit cards which is useful in terms of being able to spread costs at a rate free of any added interest. As with any sort of credit cards, it is important to make sure that you can clear the balance on the card before the 0% interest deal is ended to avoid paying charges and fees. Charges and interest rates are two things to look out for when using a credit card, with your credit rating potentially at stake if you were to miss a payment, for example. That could even mean incurring extra interest or having to pay extra charges, while making sure to pay off the balance of the card on time should be a priority.
One other benefit of using a credit card is that you are usually covered as long as you spend a certain amount, typically between £100 and £30,000. That means if the work planned does not get completed, is faulty or the company carrying out the work goes under then you will be able to get your money refunded. It’s worth double checking with your credit card provider that this is applied to you though before committing.
A variety of loans are available to take out to finance home improvements, which can be particularly helpful for those larger and more expensive projects. Similarly, to a mortgage, it is important to make sure that the repayments are affordable over the course of the loan as interest rates are likely to be higher the more you borrow.
Secured loans are favourable if looking carry out major renovations as you can borrow larger amounts and often have a longer time in order to pay it back. However, this type of loan is dependent on your assets. So, while you can get access to larger amounts and lower interest rates, even with a lower credit rating, there is a risk of losing the assets you have put forward to the bank if you are unable to repay on time.
Overall, there are of course a range of ways to help fund your home improvements, both on a smaller scale or larger scale. Whether its new windows, doors, or perhaps a new conservatory extension, if you are interested in getting the ball rolling with your home improvement plans, contact us to find out more about our finance options or check out our online finance guide.