If your property has increased in value over the years.

Any work carried out on your home is going to cost a great deal of money; home improvement loans are an ideal way to carry out necessary maintenance and remodeling. Not many homeowners have the confidence to attempt home improvements on their own so they need the services of tradesmen which are a costly part of the plan.

Two types of home improvement loan exist; secured loans which are based on the equity in the property and those that require no security at all. Loans that do not require security are quite flexible and even new homeowners can apply. The maximum period for finance without any form of equity can be up to fifteen years.

The only condition made on no equity finance is that the owners must have a joint income which is lower than the county limit where the property is but reaches the limit specified by the lender. Whilst the lenders do not hand over the money without making some checks first about the property and the applicant, these are just to provide some security for the lender as these loans are processed quite quickly.

If your property has increased in value over the years and is now worth more than you owe on it then you may prefer a home improvement loan that uses this spare equity. Equity based loans are arranged quite quickly and whilst these loans are not considered as second mortgages, they have the benefit of lower interest rates and preferential terms as part of the arrangement.

The lender will only provide funds for a secured loan based on the current equity available in your property. Although the value of your home is required, it will also take into account how much you owe both on the house and personally.

The lenders will assess all this information before furnishing the homeowner with the amount they are prepared to lend them. Although it is not set in stone, the amount they are prepared to lend will be based on a percentage of the property valuation but some lenders will actually lend as much as a quarter again as the property is worth.

When you arrange a loan this way, the lender has a claim on your home should you fail to meet payments, so only borrow judiciously and consider your ability to pay it back. Home improvement loans can be a wonderful way to tidy up an aging home but remember that they need to be paid off and if you are likely to struggle, reduce the amount you want to borrow.


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