Home Loan

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If you own your home, you have plenty more home loan options than if you are renting. To improve your home with a secured loan, consider all the usual mortgage lenders; and expect a better rate than an unsecured product.

The term "home loan" can mean "mortgage" - a loan you take out to cover the cost of buying a house. It can mean a loan which is secured against your home such as homeowner loan and home equity loan. And in this context, a home loan is a loan you take out to cover either maintenance or decoration of your home. And more confusingly, the best rates are reserved for homeowners borrowing against the value of their home.

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If you do want a loan for home improvements, do you own your home either outright or with a mortgage? If so, you have many more options than if you do not. If you are just renting, you do not have the benefit of equity in your property, and as such an ordinary loan is probably your only option, unless you're spending less than £2,500 in which case perhaps a credit card might be the answer. Any credit cards are offering incredible incentives, such as 6 months interest free right now, so do investigate them for smaller amounts.

For larger purchases such as a new kitchen or fixing the roof, a home loan is your best bet. Rates vary from 5% up to 18% depending on what lenders you go to. Look out for incentives such as a payment holiday so you can start spending before you start paying which is ideal if you're getting builders in.

If you have equity in your home, then you have a far wider selection of home loan options. Most mortgage companies will let you extend your mortgage, especially if the value of your house has risen. Most will lend you up to 95% of the value of your home. Certain lenders, will also give you a separate home loan at an exceptional rate compared to unsecured loans. If you're a homeowner you have plenty more money at your disposal and at a better rate. There are lenders who will only give you their best rates if you're already a mortgage customer, while others will open their doors to almost anyone.

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