Renovating a property is always a costly business and with the introduction of the new Financial Conduct Authority (FCA) rules for borrower affordability, it’s sometimes difficult to know where to turn for help.
1. Use your car to finance your refurbishment
If you do have a poor credit score and need to raise a loan, one option might be to use your car as a secured loan. If your car is under 10 years old you may be able to raise up to 75% of the value of the car with a logbook loan by CarCashPoint. These loans don’t have to be repaid in a single lump sum and are a useful source of finance for those with a poor credit score.
2. Remortgaging your existing property
According to the website This is Money you may be able to raise a second mortgage on your home if you intend to make improvements to the property. You should always check out the fees that you’ll be charged, but current low interest rates make this form of loan a viable option for those with a good credit rating. You will also have to be aware of ‘your bank or building society’s maximum loan to value levels for mortgages.’
3. Personal unsecured loans
If you’re looking for a quick decision on a loan, then a personal loan should yield results far more quickly than a mortgage application. The sum of money that the lender will offer you will depend on your credit rating, and you can borrow sums between £1,000 to £25,000. You’ll also have to take interest repayments and any additional fees into account.
4. Renovation grants
If you have bought a property that’s in a poor state of repair and needs substantial renovations to make the property fully habitable, it’s always worth contacting your local authority to see if you are eligible for a renovation grant. According to the website Grants Expert this type of finance is available for landlords and owner occupiers, though you will have to satisfy the council that you meet all the terms and conditions that accompany these grants.
5. Bank alternatives
Thanks to low interest rates for savers, an increasing number of people are lending their money to peer-to-peer lending companies to command a greater yield on their savings. These groups lend money to individuals and businesses. To find out more about these organisations click here.
6. Balance transfer credit cards
A 0% credit card is an ideal way to raise renovation funds for smaller projects. As long as you read the small print properly and make sure that you’re not going to have to pay excessive fees, this method of unsecured borrowing can give you access to up to 33 months of interest free borrowing.
7. Make money from your home
If you know that at some stage you will want to carry out modifications to your property, then why not let a spare bedroom in your house prior to the refurbishment? If you save up the rent money for your renovations you won’t have to go to the expense of an interest-bearing loan, and your tenant will be funding your property project.