7 ways to finance a loft conversion - without breaking the bank!
by Tanya Singh
Are you looking to add some extra space to your home through a loft conversion? It’s an excellent way to convert an empty attic space into a usable room. This could be done by adding windows, insulation, and flooring to the area.
The value of loft conversions will depend on several factors, including the size and location of your home, the cost of materials, and the amount of work required. However, on average, a simple loft conversion may cost you around £5,000 to £7,000. On the other hand, the cost of more extensive work can reach up to £75,000.
Are you wondering how to arrange the money required for the task? This article shows you 7 ways. Keep on reading!
7 Ways to Finance a Loft Conversion
There are a few different options available to finance a home extension. You could take out a loan, use savings, or even sponsor the project through a home equity line of credit. Let’s explore 7 such useful options.
1. Savings
The easiest way to finance loft conversion is from your personal savings. In that case, you won’t be paying any interest or drowning under any liability. Check out how much money you have in your account before looking at other chargeable options to get funds for the loft conversion. You must have enough if you have been saving regularly for many years.
2. Unsecured Loan
The financial institutes offer unsecured loans without any collateral. They are also called personal loans. You can utilize the money for whatever reason you want once you get the money. You must have a good credit score to get approved for an unsecured loan. They are disbursed within a few days if your profile gets a green signal from the creditor.
3. Re-mortgaging Your Property
You can leverage your property mortgage to arrange funds if you initially purchased your property through a mortgage. Re-mortgaging your property is one of the most common ways to finance a home extension. Many lenders let you re-mortgage 70-80% of your property value. Some of them may also allow 90-95%.
4. Bank Overdraft
A bank overdraft is good enough to arrange funds if you believe you can repay the amount quickly. However, generally, bank overdrafts are given for a limited time. You can take advantage of this facility if your bank provides a legitimate time limit to repay the amount, like 1-3 months. You also need your bank to allow you a significant amount in overdraft.
5. Credit Cards
You don’t usually look towards credit cards for enormous expenses. However, suppose you can get hold of a credit card company which provides 0% credit cards for the first few years. In that case, it’s possible to use a credit card to finance your loft conversion. If you can arrange to repay the money in that window of time, you won’t have to pay any interest.
6. Equity Release
If you are a senior citizen, you can easily use equity release to fund your loft conversion. It’s a common practice for senior citizens to divert their equity towards home improvement. It involves unlocking some of your property wealth, but it’s all worth it. A loft conversion will, in any way, increase your property's value. Thus, it’s a worthy investment.
7. Secured Home Improvement Loan
Secured home improvement loans can be used to finance the improvement in your property, such as a loft conversion and house extension. You get it on legitimate interest rates and spread-out EMIs if you’ve maintained a good credit score. And since it’s a secured loan, the borrower doesn’t mind lending you a significant sum.
There are many ways to finance a loft conversion. All these 7 finance options explained in this post are viable. The option you consider best will depend on your individual circumstances. You may be able to finance the project yourself through savings or a loan from a bank or other financial institution.
You can also get a grant from the government or local authority. Whatever route you choose, ensure you get professional advice to ensure the project is viable and that you can afford the repayments.
Tanya Singh works as a Content Marketer at LoanTube - a loan comparison marketplace where borrowers can connect with multiple lenders via a convenient and transparent application. She writes about topics related to personal finance and loans helping her readers in making smart decisions when they need to borrow. Yoga brings her inner peace and strength and travelling brings her joy (besides her work of course).
Disclaimer: Ginger Dog Homes is not affiliated, associated, authorised, endorsed by, or in any way officially connected to LoanTube. The opinions and advice expressed in this blog are the authors’ own views and should not be taken as advice from Ginger Dog Homes.