Reforming a house requires the disbursement of a significant amount of money that, in many cases, can not be covered with savings, so it is usually resorted to financing. But with so many offers of loan in the market, how to choose the best? There are main factors that must be taken into account when it comes to finding the best financing for a housing reform.
One of the decisions that must be taken before hiring a loan for the reform of a home is to choose the product and the entity that will give it. There are several alternatives that can be assessed in accordance with the budget and financial situation (personal loan, financing at the point of sale if, for example, we want to change the furniture of the house, expansion of the mortgage ...). The advisable thing is to assess the needs of each and, above all, compare, that is, do not stay with the first option and analyze the different alternatives in the market. The financial product comparator HELPMYCASH.com allows you to compare between different reform loans to choose the best and pay less money.
You can request a credit for consumption to make a reform. The average cost of personal loans is currently 7.60% TAE, according to the Bank of Spain (BDE). In the case of credits whose purpose is to pay a reform, HelpmyCash points out that they usually allow up to 80 thousand euros with a return period of up to eight years. The personal loan is an option if the budget is average and you want to pay it within 10 years.
It is important to compare before hiring a loan, since it can be achieved cheaper loans than mean, for example, the credit COFIDIS reform project, with a cost from 6.12% TAE. In addition, it has no commissions, nor linkages or forces to change the bank.
A very interesting alternative when a mortgage is being paid and a household reform is to be financed is to do so through an expansion of the capital of the mortgage loan. The cost of mortgages is much lower than that of consumption credits, 1.63% TAE according to the BDE, and offer a longer amortization period, although we must consider the expenses associated with the modification of the loan (the possible commission By novation, the appraisal of housing and the corresponding administrative expenses. It can be a good option for those who are paying a mortgage and wish to make a comprehensive reform of housing with a high budget.
Another option is to ask for a new mortgage. As happens with the expansion of the mortgage, in this case the cost is low and the term is long. Of course, we must take into account the cost of appraisal and, in addition, the possible mortgage opening commission. In addition, this means of financing can only be accessed if the house is paid and if the cost of the reform exceeds 30 thousand euros. In addition, this financing model uses as a guarantee itself to achieve the necessary capital to finance the reforms that you want to do. Therefore, if this option is chosen, you have to make sure that the corresponding quotas can be paid if you do not want to put housing at risk.
Do not ask for more money than you need. If some saved money is available, you can allocate a part to pay the reform and, thus, avoid asking all the cost of the operation. It must be remembered that when a loan is requested, you must return along with interest, commissions, etc., which make the total sum greater than the amount requested. Therefore, it is best to adjust the amount of money to a minimum to avoid paying more at the end.
The TIN is the interest that the financial institution will charge us for lending us the money, while the TAE is the percentage that includes, in addition to interest, other expenses associated with the loan. When comparing credits, you have to notice that both interest and the TAE are low, this will be paid less. In the case of interest, better if it is below average, which is currently 6.68%, in accordance with the last estimate of the Bank of Spain.
The term will cause interest to be generated for more or less time. A short term will make it paid less, since interest will be generated for less time, explain HelpmyCash sources. Therefore, you must return the borrowed money as soon as possible trying that the resulting fee can be paid. It is recommended that the fee will not exceed 30% of our income to avoid overwhelming and compromising compliance with the payment of debt.
By hiring a loan, it is necessary to look at whether there are conditions that can make the credit getting close. Currently it is possible to find loans without commissions, without expensive linked products, etc. Reform companies can also offer cheap loans if they are associated with any financial. It is best to compare the different financing options to make the right decision.
Date Of Update: 25 July 2021, 06:25
