Financing Your Home Renovations: Where to Start
When we buy a home, we tend to spend a whole lot of time browsing the housing market, actively searching for something that meets all of our needs. We ensure it has enough rooms and all the different features we’re looking for in a property. But as time goes on, many of us find that we outgrow our homes or begin to look for different features in our living spaces.
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This is understandable and pretty common. But you don’t necessarily have to sell up and move on in this situation. Moving is stressful, disruptive and expensive. That’s before we even begin to mention how time consuming the entire process is. Instead, you can renovate your property, taking it and turning it into something that better suits our needs.
Now, there are countless renovations that you might want to consider, from loft conversions to garage conversions, the creation of en suites, and more. You can find smaller creative ways to enhance your home too such as adding new lighting, painting the walls, or including wall decals. Homeowners can use a variety of colors, fonts, and designs to improve a living space with decals, at a reasonable cost.
A home renovation, however, is a pricey process and you need to make sure that you finance these changes in the best way possible. Here are some suggestions that can help you to make the most of your money when it comes to renovating your property!
Set a Budget
The first step you need to take when financing your home renovations is to set yourself a budget. A budget is essential to determine what you can genuinely afford. It prevents you from falling into debt and risking your home for the sake of improving it. To create a budget, look at your usual budget that you live by.
This should take your income after tax and other essential contributions, take away essential costs (such as bills) and leave you with your disposable income. Take a look at your disposable income and determine how much of this you’re willing to contribute to your home improvements. This will let you know how much you have available to spend.
Look Into Loans
The most common means of paying for home renovations is through a loan of sorts. When you take out a loan to have home renovations carried out, you can borrow the money you need and pay it back in smaller sums as time goes on.
The key to making a loan work for you is to ensure that you can definitely afford the monthly payments and that you pay them on time, as agreed with the lender (missed payments can cause financial hardship and impact your credit score and credit file). A good place to start looking is www.gemhomeloans.com.
Create a system to save money
Alternatively, you can save. If you can only find loans with interest attached, saving the money for your renovation outright will allow you to have it for the lowest price possible. Just bear in mind that this option takes patience.
While you can have the work done now and pay it back later with a loan, saving means waiting. It is possible though and is definitely viable for the more financially savvy amongst us.
As you can see, there really is a lot to think about from a financial perspective when it comes to carrying out home improvements. Hopefully, one of these methods will work for you and will help get your venture started out on the right foot!
Consult with a financial advisor on these issues- good luck!
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Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
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