Home Improvment Loan - UK-Money.com

Take out a home improvement loan and make the most of your largest asset

According to recent research by Standard Life, we spend over £4,500 per annum hiring in professional plasterers, builders and window fitters. That’s nearly one fifth of the average salary in the UK! Gone are the days of DIY madness; people are beginning to realise the error of their changing room ways and MDF overload. One in four of us would now actually prefer to get a professional job done on home improvements rather than bodge it up ourselves. As our property is seen to be our most valuable form of investment, this is hardly surprising!

Loft conversions, extensions and conservatories are the easiest way to add value to your home if you decide to stay put and make the most of your asset. These can be considerable financial outlays, but can potentially add thousands of pounds to the value of your property. If you have the savings to cover what could easily be £25,000 of work, all well and good. An alternative is a home improvement loan.

The low down on home improvement loans:

1. The loan will be secured on your home as a second charge, after your mortgage. This means that your home is at risk of house repossession if you do not keep up the repayments.

2. Your home will have to be valued as the lender will have to determine how much your property has improved in value since you purchased it. They need to make sure there is more equity in the property than the original mortgage amount.

3. As this is a secured loan, you will benefit from lower interest rates than if you took out an unsecured personal loan. Obviously this does depend on your personal financial history but in general terms, this is the case.

4. These loans can have a term of around 25 years, so you will have plenty of time to pay it back.

5. A home improvement loan normally has a variable interest rate so your monthly repayments can increase.

What other terms can a home improvement loan be known as?

1. Homeowner loan.

2. Secured loan.

3. Home loan.

Where can you obtain a home improvement loan from?

Your original mortgage lender should always be your first port of call. However, there are companies that specialise in such loans. We have reviewed a small selection of each type of company to whet your appetite for searching for the right UK home improvement loan for you.