Whether you want to add space or redecorate, home improvement projects can make your property more comfortable to live in. They can also draw in potential home buyers and add additional value to your property. But, while they can benefit your life in many ways, they can also cost a fortune. Whether you hire a pro or want to do the work yourself, your improvement projects, both big and small, are going to need financial backing. So before you start ripping out walls or choosing new appliances, you need to decide which financial option is best. Take a look at these common methods that many homeowners use to finance improvement projects of any kind.
Use your savings
This might seem obvious, but many homeowners do not consider using their savings for home improvement projects. So while you might be saving up for a new car or family vacation, you might want to consider investing it back into your property instead. Recent studies have found that a new kitchen can add as much as 5% onto the value of your property. It gives you full control, while also being easy and convenient. But using your savings can come with some drawbacks too. For instance, it doesn’t provide you with protection should major issues occur during the build. This could result in a substantial loss to your savings and leave you with an unfinished and unsafe project
Consider getting a loan
Loans are another popular method that can upgrade and improve your home. If you’re planning on carrying out large projects, this could be an ideal option for you. But should only be considered if you can make the repayments. When choosing which loan to apply for, it’s wise to compare their terms and APR rates to make sure you get the right fit. Otherwise, you could face serious repercussions. Second charge loans, for instance, use your home as collateral. So if you are unable to keep up with the repayments, your home could be in jeopardy. This is why it’s important to choose a loan and repayment plan that you can pay back comfortably. Avoid using payday loans too as these tend to come with high-interest rates.
Use a low-interest credit card
If you have a good credit score, you might also want to consider using a low-interest credit card. This is often best used for smaller home improvement projects. This is because they are relatively easy to pay off, are simple to apply for and don’t put your home at risk. If the company you hire goes bust, you are also able to claim back your money from the credit card company. This gives many homeowners peace of mind by giving their money the protection it needs. However, it’s vital that you check the rates, repayment timeline, and terms beforehand. These vary significantly so always read the small print.
It’s always advantageous to understand what options you have before you begin your projects. But it’s just as important to budget too. So create a realistic budget and choose a suitable finance option before you do anything else.