From time to time we all like to have work done on our home to improve it. This could be fixes to keep the house maintained and working well or it could be cosmetic changes to keep it looking nice. No one wants to live in a dirty, tired home that is falling apart and so all home owners will need to do refurbishment work at one time or another. It can be a costly process and some people will borrow money to do it. But is this a good idea?
There are different types of work that we do on our homes. Some are vital repairs which will stop the home being further damaged. This can include things like leaking roofs, subsidence cracks, damp problems and other structural problems. Left untreated these problems can get worse and worse meaning that you could end up paying a lot more for the repairs than you would if you left them. This means that if you do not have the money it could be wise to borrow it and get the work done rather than delaying until you have saved up and then having a much more expensive job to pay for. It can be worth getting some quotes for the work and speaking to the workmen about the consequences of delaying the work or whether it needs to be sorted out quickly. In some cases it would be fairly obvious as you would not want to delay repairing a leaking roof as it could cause all sorts of damage to the inside of the property.
If you are having cosmetic work done, such as a new kitchen, bathroom or decorating, because you want a change and to freshen up the property, then saving up the money for the work could be the more sensible option. The work does not need to be rushed as there will not be a problem with it causing more problems in the future. There is a risk that it will be more expensive in the future, because of inflation meaning prices will rise, but it is still likely to be cheaper if you wait to save up rather than paying the cost of borrowing money.
This is all seems very straight forward, but unfortunately the decision on whether to borrow money or not does not tend to always be that easy. It is necessary to add in the emotional factor as well. The house may be looking really bad and you may feel that you will have a better quality of life once it is refurbished and think that that will be well worth the cost of the loan in order to do this. It may even make you feel unhappy because it is not done and be effecting your mood.
It is worth thinking about the borrowing as well as what you are borrowing for. You should think about the amount of money that you need to borrow and look at your borrowing options. See which types of loan would be suitable for your borrowing and whether you would be able to manage the repayments. Consider what an impact those repayments would have on your lifestyle, would it be difficult to make the repayments or not? If you are not sure consider how easy you find it to manage each month and you could even actually look at how much money you have coming in and how much your bills are going out and see what the difference is to calculate whether you can afford the repayments. It sounds complicated, but if you use your bank statement you should be able to do it without too much stress.
It is always worth thinking about what might happen in the future. No one can predict the future but if you just plan what might happen. Think about whether you job is secure and therefore whether you will be able to pay the repayments in the future. The longer the term of the loan, the more risk you are taking with it. If there are two or more earners in the household then there is less of a risk. If you have some savings behind you, then you are also taking less of a risk. However, it may be wise to use your savings to pay for the work, rather than borrowing as it will be cheaper.