Your Home Improvement Guide

Home improvement financing can help anyone who wants to make substantial changes to their home but lacks the capital.

Home improvement financing can help anyone who wants to make substantial changes to their home but lacks the capital. We discuss a few forms of home improvement financing, along with their benefits and drawbacks. Finally, we include important information on your responsibility to your mortgage company, when undertaking home improvement.

Home improvement financing is important for the safety and security of your home. The building and plot of land you own is probably the largest investment you will ever make and, in the interest of maintaining the value of your investment and possible increasing it, home improvement financing can be a powerful tool. The objective of any home improvement financing plan is to give you cash to use for medium to large improvements to your home. Most small improvements should be payable from savings or liquid cash.

The types of projects which you might require home improvement financing to undertake include: Installation of double glazing, construction of a conservatory or extension, building a garage, converting your loft space or installing a new kitchen.

The application process for home improvement financing is typically similar to that of getting any type of loan. You will be expected to provide proof of earnings and your job, along with evidence of home ownership. The loan financer may specify that the funds are used on specific parts of home improvement, but this is not common. You’ll be able to secure home improvement financing from banks, building societies and specialized loan companies. Each has particular benefits and draw backs to consider.

* Building societies focus on loans of this type. Home improvement financing is part of their core loan business and so they understand the dangers and pitfalls better than most institutions. They may offer you to transfer your mortgage to free up some capital, or offer a separate loan. The size of the loan cannot exceed the value of the property once the alternations are complete.
* Loan companies work less carefully and may not require you to account for your home improvement financing so clearly. The downside is a higher repayment rate, and potentially less available loan money.
* A bank loan, or bank overdraft may be the simplest loan to get, particularly if the bank providing the home improvement financing is where you keep your current account. Overdrafts are relatively simple to arrange, but there may be significant fees to consider.

Whatever your source of funding, it is essential that you contact your mortgage lender before you undertake any home improvement financing agreement or make structural modifications to your home. The lender has an interest in the security and structural soundness of your house, because they partly own it!

For more information on the types of projects which might benefit from home improvement financing, take a look at our sections on flooring, windows, landscaping and Pools, Spas and Hot Tubs.