Loan for renovation – mortgage or cash loan

Posted: August 15th, 2013 | Author: | Money

Larger renovations often require large amounts of money, and unfortunately from time to time need to be done. If you want to perform a lot of work in our house, it’s possible that we will have to back up their financial base by taking out a credit. In this case, banks promote two different ways – cash loan and mortgage. Let’s look at both.

Mukumbura / photo on flickr

Mukumbura / photo on flickr

Mortgage allows us to borrow a really large amount of up to tens of thousands of dollars. By the way, the interest rate is very beneficial and long repayment period, which allows for the arrangement for their finances in a way excessive. This is a good option if you want to carry out a large renovation and need a large amount for this purpose. If you pay small amounts it is nor profitable to do it that way. Why? Taking out a mortgage is associated with additional costs such as property valuation, land register entries, etc. These fees are fixed and If we pay only small amounts, it may be that the cash loan is still cheaper. It should also be noted that the property can no longer be mortgaged. If it is, then we can try to renegotiate the loan and try to get an additional amount to the existing loan.

Quite another option is a cash loan. Its costs are usually much higher than mortgage and repayment period is quite short, but in case of smaller amounts of money that are needed to repair something it is a great and quick solution that does not require additional charges beyond the interest. Thanks to this solution you can also avoid paperwork and collect documentation quickly. Other sources of funding repairs are limits on debit accounts SAVING ACCOUNT, which, although small, they often provide us with the “available” several thousand. The repayment of such debt requires discipline, but interest decreases with increasing state of your accounts. In general, they are taken on one fixed day and if we will ensure our debt to be relatively small that one day, this interest will also be easier to swallow.

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