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 By
Sarah Christensen
If you are thinking of home
improvements, but do not have the money available, then consider the merits
of taking out a home improvement loan.
Many home improvements can add value to your property
such as a new bathroom, kitchen, or roof. Other home improvements can save
you money in the long run by being energy efficient for example double paned
windows, wall insulation, or a new, more efficient heating system.
There are a wide variety of organizations offering many
variables such as secured or unsecured, and fixed or variable interest
rates. You can get a home improvement loan
secured on your home if you have equity available to you. (If you are a
tenant and rent the property you cannot get a home improvement loan). The equity is the proportion of the principal
that you have paid, in other words the value of the proportion of your home
that you own outright. The interest rate is generally more favorable as the
lender is less exposed to risk. Your home is at risk if you do not keep up
repayments on this or any other loan secured on it. An unsecured loan
generally attracts a higher interest rate to reflect the risk the lender is
taking on the possibility that you will default (be unable to pay). Your
current mortgage lender may offer you a good deal, since the value of your
property they have lent you money to buy will increase.
Whatever you decide to do, shop around to get several
quotes and take the advice of a professional. Some home improvements are
covered by government subsidies and others may be tax deductible.
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