1 of 3

Write now Article Tools

A home improvement loan is more than just a loan. It's a loan that will ultimately increase the value in your home. It's not money being spent, it's money invested in the future.
Because of the way property prices are structured, you could find that investing $10,000 in home improvements could add $20,000 to the overall value, which could be great if you are planning to move in the next few years. Even if your not planning to move in the next few years, it's still an investment for the future.

The loan can be used for any home improvements with fixtures and fixings, like a kitchen or bathroom, but don't expect to be able to kit out a state of the art home cinema room! Anything that will be left behind when you move is a fair summary.
The key to a home improvement loan is planning. Make sure you know exactly what you want, what you can use the loan for, how much it will cost and more importantly, how much value will it add to your property. Banks will always be more helpful if you have done your homework.
So what options have you got? There are many types of loans, but there are four primary home improvement loans available :
* Mortgage. For first time buyers getting a home improvement loan can be easier, although it will increase your mortgage payments. Loans of this type often come with a lot of terms and conditions, but are often the only option for first time buyers.
*Re-mortgage. This option allows you to add to your mortgage by releasing equity that is currently tied up in your house. It will usually pay out a lump sum and in return your mortgage payments increase. Most people with a good credit rating and careful planning will be eligible for this type of loan.
* Secured Loan. This type of loan will be secured against the value of your house, and is usual if you are borrowing from a bank other than your mortgage provider. The rates are usually variable and it's good to shop around and negotiate for the best deals.
* Unsecured Loan. This is the same as a secured loan, although your house is not used as security. The interest rates tend to be a lot higher for this type of loan and should not be considered if you have property to use as security.
No matter what type of loan you go for, always shop around. Look for the best rates now, but also for the future. Taking out a fixed rate loan for five years might be good at the time, but if you don't plan ahead you might get a shock when the fixed rate finishes.
Talk to an adviser if possible, and get as many opinions as possible. Remember, it is an investment so you always want to make sure you get your money's worth.

Learn more about this author, Mark Steele.
Click here to send this author comments or questions.

Add your voice

Know something about What is a home improvement loan??
We want to hear your view. Write now!