KIS Bridging Loans
Presented by KIS Finance

The new year is often a time for change, and for many homeowners, this means putting their DIY and home improvement plans into action.

Depending on the size and type of project you’re doing, home improvements can come at a big cost. There are plenty of ways that you can save money, but there are also some risks that you need to watch out for if you want to complete your project without losing money.

Pick the right project

Your home is your home first, so you should prioritise any improvements that will make you happier living there if this is your forever home. However, if you’re planning on doing the property up to sell on, you will need to consider what improvements will increase the value and what changes may make the property harder to sell.

Modernising the kitchen, converting the loft into an extra bedroom, or adding en-suite bathrooms are very popular and a good place to start if you’re trying to increase the value of your home. Putting in an outdoor swimming pool, however, or combining bedrooms or doing anything too quirky with the decorations could hinder the selling process and leave you out of pocket.

It may also be worth looking at similar properties in your area that have sold recently. Look at what they’ve sold for and whether they boast anything that your property doesn’t, especially if they’ve sold for more than your property is currently worth.

Watch out for cowboys

One way you could lose huge amounts of money on a big home improvement project is by using a tradesperson or firm who are incompetent and unprofessional. You can easily be tricked into using cowboy builders and other tradespeople because they usually quote a price far cheaper than anyone else.

This can lead to expensive delays, work that is of low quality, or work that gets abandoned altogether.

Use tradespeople which have been recommended personally by someone else who has used them. Alternatively, use websites like CheckaTrade to make sure they’re property vetted. Never use a person or firm who demands cash payment upfront or has cold called you to get business. You should also be sceptical if somebody gives you a quote far below the average.

Get the finance sorted

Before you even start the project, you need to work out exactly how it will be funded. Are you paying for it out of savings or will you need to set up some kind of loan or development finance facility? There are several different routes to choose from depending on the size of the project and how long it will take.

It’s important to work out all of these details before deciding on the route of finance. Taking out a development finance facility and then going way over term could end up losing you a lot of money in fees and additional interest, or taking out a personal or secured loan and then not keeping up with the repayments will cost you a lot in interest as well as damage your credit score.

Get the paperwork in place

Your renovations will only add value to your home if all the regulations have been met and all the right certification is in place. You might even devalue the property if the paperwork isn’t straight which could mean your whole project going to waste and thousands of pounds being for spent for nothing.

Watch out for fraud

You may have been very diligent when selecting a tradesman or firm, but be aware that you could still be targeted by scammers in what’s known as invoice fraud.

Scammers hack into peoples’ email accounts and target anyone who seems to be doing business with a tradesperson or company. They can then impersonate that person or company and send you a fake invoice from a fake email address saying that payment is due. They put their own bank details on the invoice then, as soon as the payment has been made, they move the money to a different account and disappear without a trace.

When you have a legitimate invoice due, contact the company or person you’ve been dealing with to ensure that it was them who sent it and make sure the bank details are correct. Do not use any of the contact details provided in the email, use the details you have used for communication previously.

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