The 5 Best Tips To Get Low Cost Home Improvement Finance!

Michelle Tuvey Michelle Tuvey | Loan Underwriter

Homeowners are always looking for ways to improve their properties for both their own enjoyment and to increase future resale values. Doing so is one of the benefits of owning over renting. Financing home improvements, however, can be a challenge if you do not have the cash on hand. However, that's why home improvement finance through a secured loan is such an important tool to property owners.

A secured loan allows you to borrow money against the value in your property. That value is known in the banking industry as equity. By offering the equity in your home as collateral for a loan, you are able to borrow substantial amounts of money to make those home improvements you are looking for. Imagine having tens of thousands of pounds at your disposal to renovate the kitchen, add a second bathroom, or renovate a loft.

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Here are our top tips for finding and obtaining low cost home improvement loans based on the equity in your home:

1. Know Your Equity

Our first tip is to know your equity before you apply. Why do we recommend this? Because the total amount of your equity will be the upper limit of what you will be able to borrow. If you need more than what your equity allows for, you may need to take out multiple loans which, in turn, will affect your borrowing strategy. For example, needing multiple loans dictates that you apply with the lender that has the highest loan-to-value (LTV) ratio first.

2. Compare APR with Representative APR

Lenders offering secured home loans advertise both a standard APR and a representative APR. You need to know what both are. The standard APR is the amount of interest you will pay on your loan over its lifetime; the representative APR is a combination of the standard APR and the additional costs and charges assessed by the bank. Knowing both numbers helps you better understand how much you will be paying in terms of the added fees and charges.

3. Check Your Credit

It helps to know your credit rating prior to applying for a secured home loan. Checking your credit immediately lets you know whether or not there is anything amiss; anything that could possibly result in a higher interest rate, less-than-favourable terms, or an outright rejection. If you do find anything amiss, get it straightened out before you apply for your loan. Free credit checks are available from numerous companies online.

4. Compare, Compare, Compare

Comparing home loan offers can be an arduous process. However, comparing is necessary if you want the lowest cost loan possible. You should look at the multiple loan products from the top secured loan lenders in our whole of market UK comparison tables in order to know who is offering the best deal. As with buying insurance, you increase your chances of getting the best possible deal by comparing as many lenders that meet your criteria as you can.

5. Understand the Charges

Lenders add all sorts of charges and fees to the loan process. For example, nearly every lender charges what is known as an establishment fee. This covers their costs for reviewing your loan application. In order to get the most affordable loan, you need to know what all of these costs are going to be up front. Be especially sure to ask about an early repayment fee. Such fees can add substantially to the cost of your loan, making it a disadvantage to pay off early. Do your best to find a loan that has no early repayment fee.

As an alternative, why not let us do the work for you. A simple call to our team of friendly secured loan experts is all it takes to find out the best lenders to suit your personal circumstances. Our team has extensive knowledge of all the lenders and the latest news on what they are currently offering. Our team charge nothing for their advice and if you decide to go ahead with any of the offers they find they will inform you of all the costs before you make any commitment to proceed.

Obtaining low-cost home improvement finance is all about understanding the process and how lenders work. The more you know about secured home loans, the stronger your position will be. When you do find the ideal loan for your circumstances, our experts will present your case to the lender in the best possible light and maximising the chances of a successful application. Within a short space of time you could have the money at your disposal to take care of all of those renovations you have been planning for so long.

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