It goes without saying that transforming your home becomes a lot harder when you don’t have the proper finance in place.

That being said, few people have a cool £20-100,000 lying about. For many, home improvement is made possible either through remortgaging or through a homeowner loan.

If you plan to go down this finance route, you might be wondering when the best time to sort out your budget might be. After all, you don’t want to get a loan only to find it won’t cover your costs, but you also don’t want to get so far along in the process you mislead your professionals on what you can afford.

To navigate this sensitive subject, Resi’s finance team have this advice…

Three times to consider when sorting your finance

If you’re someone who likes to keep their options open, you’ll be happy to hear there are three key moments in a project when you might bring apply for finance.

This does offer a certain level of flexibility. However, each stage has its pros and cons. Therefore, you need to think carefully on which one is right for you.

Concepting with your architect

This is one of the first steps you’ll undertake, and is essentially a brainstorming session with your assigned architect to work out what’s possible, your priorities, and to map out some basic ideas.

Pros

• Applying for finance now means you’ll be able to confirm your budget to every future professional you’ll work with, which will make your budget easier to manage - and means you only approach services you can afford.
• Getting finance in place can take up to 90 days, so it’s good to get it over with early on.
• You’ll also be able to know from the start what budget you’re working within, and adjust your plans (and expectations) accordingly.
• The money you secure can also be used to pay your architectural /professional fees.

Cons

• Quite simply, you don't know how much the project will cost at this stage. Generally, when developments are undertaken, it's not until you start engaging with builders that you know how much the whole thing will cost - and even then the difference in quotes can be significant.
• Any offer from a lender will need to be revised every 3/6 months, which means you could invest a lot of time, only to have to go through it all again should there be delays in planning permission, etc.
• If you decide to borrow the money, and it’s wrong, it could result in increased arrangement fees, borrowing money you don't need, and a significant amount of wasted time.

Planning

Whether you’re in the process of submitting your planning application (and things look promising), or you’ve just been given that sweet approval, the planning stage might be right for you to consider lenders.

Pros

• Planning is close enough to the build stage that you’re more likely to know what you want you want to achieve, and will have a rough estimate of costs - though take these estimates with a pinch of salt!
• From a finance providers perspective, you’re closer to drawing funds, so there should be less need for revised offers.
• As mentioned before, the earlier you get your finances in place, the fewer costs you have to cover from your own pocket. After planning comes building regulations, which requires several different experts and typically costs between £2000-£4000 for a smaller project, or £3000-5000 for larger ones.

Cons

• Just as in the concept stage, you don’t know for sure how much budget you’ll need. After all, contractors are one of the biggest costs you’ll face, and prices for the same construction project can vary massively between companies. What’s more, until you have a building regulations package, its advisable to hold off on approaching said builders.
• Again, because you can’t properly confirm your budget, borrowing money at this stage could result in borrowing too much or too little - along with the wasted time, money, and effort.

Tendering / Choosing your builder

Finding the perfect contractor, also known as the tender process, is one of the most important steps. During this stage, you’ll get the best idea yet of how much your project will cost overall, as well as establish payment plans, which will encompass everything from day-rates, materials, and subcontractors.

Pros

• With builders by your side, you should now have a much clearer idea of what budget you’ll need to achieve your goals.
• Because you have such a clear idea, and construction is the next step, you should only need to make one application, with no time-consuming revisions.

Cons

• You might know how much you need, but your finance provider might not agree. It’s not uncommon for providers to give you less than you requested, and if a contract has already been signed with your builder, it could mean you have to dip into savings / credit cards to cover the additional costs.
• If unable to cover the costs of construction, you face significant financial pressure, which could mean the project doesn’t go ahead or needs to be revised.
• By this point, most of your professionals, such as architects and structural engineers, will have completed their work so refunds won’t be offered if the project fails.

If you want to make money one less thing to worry about, book a free consultation with our team. You can also find out how much your potential project might cost using our handy calculator!