Follow the steps below to make sure you get your house in order when paying for home improvements.

Set a budget and compare tradespeople

Why?

This will help prevent the cost of your renovations from spiralling out of control by avoiding the ‘extras’ you hadn’t planned for.

How?

List all the things you want done – and ask for written quotes rather than estimates.

• a quotation is an agreed fixed price 
• an estimate is approximate price that could change.

Make sure you get at least three quotes and compare them in detail and try to find reviews from previous customers.

When you choose a tradesperson, make sure you get a written costed agreement. If they tell you they need to do work after the job has started, ask for a written estimate and another costed work schedule. Do this before agreeing to spend any more.

Decide on the best way to pay for your improvements

Why?

Taking the time to work out the full cost of any borrowing is a good way to make sure you can really afford it.

How?

If you’re able to, try and pay for as much as you can using savings, interest charges can add up quickly. It’s important to keep enough in savings to cover any unexpected costs.

Pros and cons

Pros

• You won’t have to worry about monthly loan repayments, or the terms and conditions of your finance agreement.
• Being rejected for a credit card or loan could negatively affect your credit report. Using your savings means there’s no chance of that happening.

Cons

• You might find your plans are limited by a smaller budget, and you might be tempted to compromise on the quality of your build.
• You’ll need a substantial amount of money available straight away.

Choose the right type of finance

Why?

If you do need to borrow money for your home improvements it’s important to not take out debt that you can’t afford to pay back. And don’t forget that any application for a loan or credit card may have a negative effect on your credit score.

How?

• Read our guide to the different types of finance.
• Read our guide on Increasing your mortgage – getting a further advance. And to find out how much your monthly payments could be, use our mortgage calculator.
• Find out more about secured and unsecured borrowing.
• For small home improvements, consider a credit card giving 0% interest on balance transfers or new purchases. If you’re hiring a tradesperson they might not accept credit cards but it’s worth asking. If you’re buying parts for the build with a credit card you might benefit from Section 75 protection. Find out more in our guide How you’re protected when you pay by card.

Here are some tips

• Identify the cheapest way of borrowing over the shortest time period. And compare the total cost of borrowing, not just the interest rate. 
• Read our Working out a repayment plan for your borrowing guide.
• Work out monthly repayments using our loan calculator.