How to finance a building renovation

Written by Posted On Friday, 23 June 2017 03:40

When looking to urgently renovate your home or other property, but you lack the financial capability to accomplish your vision, the next step to take is to seek a financier.

When seeking a financier, it’s advisable you keep in mind the sort of conditions a probable lender might attach to loaning you money. Taking money from a lender without knowing or being prepared for the attached conditions can lead to you finding yourself in a very uncomfortable position of debt.

For example, if you’re looking to renovate your UK home, the smart thing to do would be to first carry out an extensive research concerning lenders capable of Investing in Property Development UK buildings. Upon collating your list of probable lenders, the next step would be to consider what sort of loan facilities they have to offer and which will be the most suitable to satisfy your needs.

Some of the better options you can opt for from financial institutions include;

  1. Home Equity Line of Credit

Also known as a HELOC, this form of borrowing allows you to take a loan from the bank whose sum is equal to as much as 80% of the current market value of your home. But it’s strongly advised that you only borrow an amount that is equal to the sum you actually need to renovate your home and nothing more. This is because taking a huge loan you don’t actually need can put you in a position where you’ve exhausted the loan sum on something unnecessary, only to have yourself unable to settle your debt with the bank.

HELOCs have a draw period and this means that during the draw period, you can spend money from your open line of credit.

  1. Take a Personal Loan

This involves you using your home equity to receive a personal loan from your bank. The only problem is the interest rates on personal loans are usually quite high, but the advantage is you aren’t necessarily required to put up your home as collateral before being able to access a personal loan.

  1. Credit cards

This isn’t usually a good option because of how high the interest can be on each purchase made with a credit card.

  1. Other options

Asides from financial institutions, another source you can loan from are your friends and/or family. The downside is you might not be able to get as much money from them as you would from a professional financial institution. But on the upside, unlike the first three options, there will likely be no interest accruing on the loaned sum. Also, there’s less pressure concerning when you have to pay back. Unless of course your lender suddenly has an urgent need for the borrowed sum.

Investment in property comes with risks as well as the possibility of rewards.

For more information visit here https://www.crowdlords.com/full-risk-disclosure

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CrowdLords

CrowdLords offer buy to let property & investment property in the UK. We help you raise the funds you need from our crowd of Investors. High income producing investments.

https://crowdlords.com/

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