Have you just bought a house that requires major improvements or has it been a long time since you have to do major work in your home? Want to do a complete overhaul of your garden or install an alarm. Do you want to make your house less energy-consuming? Whatever your desire or need for work or renovation, it is often useful and necessary to make a credit to take action to spread the payments. So no need to use your savings to increase the value of your property through work.
Across Lender has analyzed and presents you the best offers on the market in the table above but also all the useful information to understand the ins and outs in order to make the choice that best suits you knowingly.
What type of loan is the construction credit – renovation? How much can we borrow?
The work loan is an installment loan intended for carrying out renovation, alteration or improvement work in your home. It is possible to borrow sums ranging from a few thousand to several tens of thousands of dollars.
What types of work can you finance? Materials, subcontracting, ….
The renovation loan can be used to purchase materials for work you do yourself, DIY or to pay professional providers. Here is a non-exhaustive list of what you can do with this installment loan:
- replace your chassis,
- renovate the plumbing or electrical installation,
- build a swimming pool,
- build or renovate a terrace or veranda,
- change your kitchen or bathroom,
- install protection systems such as an alarm, a secure door,
Your ecological work is rewarded … we speak then of green loan
Some organizations offer a “green loan”. This translates into an even more attractive rate provided that the improvements made to your home save energy. Each organization has a list of projects that can benefit from a green loan. Here are a few examples:
- a new boiler or major maintenance of your current boiler,
- installation of photovoltaic system,
- insulation work,
- installation of a heat pump,
- placement of double glazing or high efficiency glazing,
If you wish, you can also finance an energy audit for your home in order to know how to act effectively.
Choosing between a mortgage loan or a construction loan: implications
Both types of loans can be used to finance works. How to choose and what are the differences?
The mortgage allows you to benefit from a more attractive rate but it is subject to certain additional conditions:
- appear before a notary,
- be covered by a mortgage that will give the lending organization the right to sell your home in the event of default,
- obligation to take out outstanding balance insurance.
The mortgage loan is more attractive from a tax point of view as long as you do not already reach the authorized ceilings with the repayment of the loan of your home.
The choice of mortgage will preferably be made if you have to borrow large sums over longer periods. Under these conditions, the advantage of a better rate could take precedence over the additional costs it involves (notary, insurance, mortgage registration, …).
A home improvement loan is much more flexible. There are no notary fees or mortgage registration fees, and outstanding balance insurance is not mandatory. However, the rates that you can negotiate will be significantly higher and you will not get any tax benefit. The duration of this type of installment loan is generally maximum 10 years and depends on the amount borrowed.
You will generally choose the work loan solution for smaller sums that you will repay more quickly.
What to do if you do not own your home?
The renovation loan is reserved for a home that you own. If you want to carry out small development work in the apartment or house that you rent, you can compare the simulations of the development and decoration loan.