Regular readers of my blog will know that I moved into my late grandparents (and late parents) house last year. The house itself has been within my family for 65+ years now, and not much modernising has occurred in that time. In the past year, I’ve realised that the entire house needs re-plastering, the kitchen needs replacing and I need to get a driveway added. On top of this, all of the windows and external doors need replacing. Needless to say, all of these jobs cost money. So with that in mind, today I’m sharing some tips on funding expensive home refurb jobs. Read on to find out what your options are.
Tips On Funding Expensive Home Refurb Jobs
As a home owner, you’re responsible for all of the upkeep and maintenance of your property. However, there are a few ways you can get help towards the cost of some jobs. Read on for some ideas…
Green Homes Grant
In England, you can apply for the Green Homes Grant to get help towards the cost of making your home more energy efficient. This grant can be spent on insulating your home, replacing single glazed windows and installing cavity wall insulation.
You can also use the grant to cover the cost of adding thermostats and smart heating controls. Additionally, replacement doors (in some circumstances) and replacement boilers can be bought using the grant. In total, you can get up to £10,000 towards improvements.
(Re)Mortgage Your Home
I’m fortunate in that the home I inherited is mortgage free. This means that for the past year, I’ve not been tied to mortgage or rent repayments. So I have been able to fund a lot of the smaller jobs myself. I’ve now reached the point where I need to unlock some of the equity in my property to allow funding expensive home refurb jobs. Rather than just going to my bank and applying for a mortgage, I have done a fair bit of research.
Mortgagecalculators.info was a great place to start. First, I learnt the difference between adjustable interest rates and fixed term rates. Next, I learnt why an interest only mortgage is not a good option if you want to clear your debt quickly.
Next, Mortgagecalculators.info helped me to figure out the difference between a standard mortgage or remortgage. The fact I own my home outright, and haven’t had a mortgage on it myself means I’ll struggle to get a remortgage on it. This is because there’s no outstanding mortgage balance to pay off. Therefore, a standard mortgage is the best option for me.
Do The Mortgage Maths
A £30,000 mortgage is enough to let me clear all of my debts and get the essential work done on the house. If I pay this back over 6 years, I’ll be paying around £455 per month, at 2.97% APR. This is less than my current outgoings for existing debt, so I’ll actually be a little better off each month as well!
Take Out A Loan
After I’d scoped out my bank’s mortgage terms, I did a quick loan rate check. I was shocked to find taking out a loan of the same value, over the same period cost significantly more. The bank loan’s interest rate alone was more than double the mortgage APR…
So all things considered, it’s fairly safe to say it’s cheaper to take out a new mortgage than a bank loan when funding expensive home refurb jobs. Finally, before you take the plunge and apply for a loan or mortgage, check out Citizen’s Advice for some great suggestions.