What is a Home Improvement Loan? Change Your House the Way You Always Wanted
Isn’t it exciting to remodel your home? Choosing the colors for your walls, tearing wall papers and using brand new elements? Building a new room? Yes. However, building your ideal home is no easy job. Construction takes time and money: choosing the right elements and the right architect to build it seems like a difficult task. Sometimes it can be easier to improve your home, instead of building a brand new home from scratch. And that is the moment in which a home improvement loan comes in handy. In this article, you will find out information about home improvement loans, the banks that offer this service and how is it useful. Below you will find some frequently asked questions.
What are home improvement loans?
Improvement loans are financial aids to help you upgrade your home in multiple different ways. The bank provides you with a loan that allows you to make some changes in your home. Do you need to fix the ceiling? Does paint keep on falling off? Do you need to enlarge your home to create an extra room because the family is getting bigger? There are multiple possibilities. Perhaps you need the money to build a garage for your new car, or you might have to fix the stairs or a whole in the roof. That’s when the home improvement loans are incredibly useful. They allow you to make improvements so that you can lead a better life.
What is a secured home improvement loan?
A secured home improvement loan is the same as a regular home improvement loan, with the difference that it is secured. This means that the bank will make use of some of your assets as collateral. The creditor will give you the loan but, in case you fail to pay the loan, this person will take possession of what you used as collateral. For instance, you can use:
a portion of rights to property of the applicant
foreclose of your house
This is a way for creditors to ensure that they will get paid somehow; it is a way of assuring a secured debt in case things go wrong. If your aim is to avoid using assets as collateral, then you should apply for an unsecured loan. This way you would have an unsecured debt that would not depend on assets.
How does a renovation loan work?
A renovation loan for your home can be quite beneficial. It is important, though, to learn how it works. In general, it is quite simple: you apply for the loan in a company that you trust. They will evaluate your application form and will make a decision whether to approve the loan or not. You will be then notified. If your loan has been approved, there will be an appointment with the bank and they will settle some conditions. You will then be receiving your funds so that you can renovate your home.
Which loans are available for home improvements?
There are different loans available and there are different ways of financing. Renovating gives you the possibility to increase your home’s market value. However, it can be quite expensive to carry out alterations in your home, and so it is important to know the different ways in which you can finance the renovation of your home:
Extend the home loan that you already have
Apply to the bank for further lending
The first option implies that you would be re-advancing on the home loan that you have. Standard Bank is the organization that offers this option, for instance. It enables you to borrow a part of or the entire loan you’ve asked for. You will be able to apply for further re-advance once the balance of your home loan reduces.
The second option means that you would be applying for more lending. This would take place above the bond you already have. This option is also offered by Standard Bank and it is quite recommended since it enables you to cover most of your home alterations. The bank will be in charge of carrying out a valuation of your brand new home in order to establish the present value of your home.
Can I calculate the amounts of the payments of my home loan?
Yes. You can do this by using a home loan calculator. You just have to enter some bits of information such as the type of loan, the term and amount of the loan.
Can I get a construction loan for a remodel?
You can. However, this option is rarely used or even offered by banks. In general, construction loans are only given to those customers who are looking forward to building their own homes from scratch. There are, though, some companies that offer this possibility.
Which banks offer home loans?
In South Africa, you will find multiple banks that offer these kinds of loans. The ones that have proved to be quite effective are Standard Bank and Builders Bank.
Can you write off interest on a home improvement loan?
It is possible. However, the bases are set by each independent bank so you should check whether they offer this option or not.
What is it?
It consists in a loan that enables you to carry out modifications in your house
How does it work?
You apply for the home loan, you get the funds and you start investing them.
What should clients take into account?
The alterations will determine the amount of money you will need.
Find the best loan of South Africa
In conclusion, home loans are a good deal when you are thinking of doing something exciting as remodeling or upgrading your home. There are different options you can choose from in the market, which means that you simply have to find the one that fits your interests better. If in doubt, remember that you can get in contact with Builders Bank or Standard Bank to find out more about their loans, requirements and restrictions. Not all financial entities offer the same products or services so you should be alert to what they offer. No company is better than the other, they simply display different financial benefits that you can use in your advantage and for the sake of your home renovation.
Questions and answers
Can I build new rooms with this loan?
Yes, you can do that and more.
Is it possible to enlarge my house?
Yes, you can do it.
Are the rates high?
The rates are set by the bank and the conditions of the market, so they change everyday.
I love my new kitchen. These loans really helped me
The loan allows you to carry modifications without using so much money
The loan was actually very helpful since I could build a second garage