Unless your lotto numbers have come up or the kids have left their piggy banks unguarded you will need to raise finance either through a secured loan or a re-mortgage to pay for your new loft conversion.
Obviously the first thing to consider is the cost of the project. A loft conversion usually costs between £18-50,000 – against that cost the homeowner has to balance two factors:
Can I afford it and will the work add value to my property?
The first question is the most important. You must carefully consider all the possible costs involved in converting your loft and that you can comfortably afford the added financial burden of a loan.
The second part of the equation is easier to answer. Conversions that are well planned and executed will add value to your property and can add up to fours times more value than new kitchens or bedrooms.
Once you decide to go ahead with the loft conversion then the options for paying for the project need to be explored. Obviously with any sizeable financial commitment it is advisable to enlist the services of a professional to receive the best advice.
And, when calculating the cost of the loft conversion it is best to over budget.
Remember – it isn’t just the cost of the building work you have to think about but also the added cost of furnishing the finished project and any of the unforeseen issues which always arise when undertaking major building work.
When thinking about the options for paying for the loft conversion a re-mortgage is probably one of the most popular ways of raising a home improvement loan.
A re-mortgage simply means taking out a new mortgage which will pay off your existing debt and leaves a residue of cash to pay for the loft conversion.
A re-mortgage can be raised with your existing lender or you may consider switching to a new lender.
Staying with your existing bank or building society has the advantage of familiarity and if you are happy with the way they have administered your account than this could be the best option although the inevitable added fees need to be carefully considered.
On the other hand, raising a re-mortgage with a new lender could result in a lower interest rate and payments though, again, there will probably be fees to pay for switching lenders.
If a re-mortgage is something you do not wish to consider than a secured home improvement loan will be the way forward.
This loan will obviously be raised against your property so will need as much consideration as a re-mortgage but, again, there is the option of staying with your existing lender or approaching a new one to secure a lower interest rate.
Obviously the bottom line here is not to take on a financial commitment you can’t afford and to always seek professional advice when considering a home improvement loan.
For more info see the related pages below