Due to the coronavirus pandemic more of us are now working from home, and for many employers home working is very much here to stay.
But whilst some people are well set up for working from home with a dedicated home office, for others home working has been more challenging, whether this is due to a lack of space or lack of a quiet environment.
Because of this, many people are considering making home improvements, including transforming a spare room into an office, adding an extension onto their house, or installing a studio in their garden. All of which could potentially add value to your home.
People are now exploring different ways to finance these home improvements, with secured loans being one of the most popular solutions.
What is a secured loan?
A secured loan, also referred to as homeowner loan and second charge mortgage is used to borrow money against your home that is paid back over a fixed term.
Typically with a secured loan you can borrow larger amounts of money with a lower rates in comparison to an unsecured loan. This is because they don’t use the borrower’s assets such as their home as security.
The amount you are able to borrow from a secured loan is based on the amount of equity that is available in your property. Equity is simply the difference between the amount of borrowing you still have outstanding against your property, and the current value of your home.
However there are other factors that contribute to how much you could borrow, including your annual income, credit rating and your ability to pay back the loan.
It is important to note that with a secured loan, lenders have the right to repossess your property if a borrower stops making their monthly repayments, to take back the money they are owed.
How could a secured loan help?
Many people decide to use a secured loan to make home improvements because they tend to be more cost effective in comparison to an unsecured loan. With a secured loan you can borrow more money over a longer term and the interest rate is lower as the money that is being borrowed is secured your home.
A secured loan could provide you with the finance you need to create the office space you require to work from home, whether it’s a loft conversion or simply converting your garage into a functional workstation.
Need advice? We can help.
We have years 30 years of experience in helping people find the right type of loan for their circumstances, specialising in secured lending for those who have a poor credit score, who may have previously been turned down by high street lenders.
If you are considering taking out a secured loan to make home improvements and would like to discuss your options with a qualified advisor, call us on the number at the top of this page or complete our ‘Contact Us’ form and we will call you back.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.