Carrying out home improvements on your home is a popular choice among many homeowners. Home improvements can sometimes be necessary before a property can be sold such as replacing an old roof or installing central heating but often improvements are simply made to add more space and make a home more enjoyable as well as potentially increasing the value.

A small two storey extension can easily cost upwards of £20,000 (source Yahoo Answers & House Extension Online) and unsecured loans are usually only available up to £25,000. When the cost of furnishings is added it’s easy to see how a secured loan could be the answer.

Secured loans may not be the only option as it may be possible to extend or top up an existing mortgage to raise the necessary funds provided there is sufficient equity in the property. This option would need to be discussed with the current mortgage provider to establish if it were possible.

Secured loans are available for much greater amounts than unsecured loans and some companies will lend up to 125% of the property value. For a property worth £100,000 with an outstanding mortgage of £80,000 it may be possible to borrow as much as £45,000. The actual amounts available from secured loan companies will depend on a number of factors including the applicants individual circumstances and the purpose of the loan.

Some lenders may be more inclined to lend money if they know it is going to be used for home improvements that increase the value of the property the loan is secured against.

As with any form of borrowing it is important to budget in advance to ensure the loan can be managed responsibly without causing a strain on finances and potentially leading to missed payments.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.