When we hear the word mortgage we immediately associate it with moving house but many people are remortgaging for home improvements and realising that adding the cost of home improvements to their mortgage can be cheaper than other forms of finance such as taking out a personal loan or using a credit card. Raising the value of your property and giving your family more space could be just the right decision to make as it is almost always cheaper to renovate your existing residence rather than selling up and moving home to a larger property.
What factors will be taken into consideration when remortgaging for home improvements?
Affordability of the mortgage is key, so when you approach a mortgage broker to consider what maximum amount you can raise, the mortgage has still got to be affordable from the lenders point of view. We would therefore look at your personal circumstances, such as income and expenditure and credit history. Other things that will be considered is the type of property you own, it’s location, condition and value, as this will dictate how much you can borrow.
How much can I borrow on a home improvement remortgage?
Your borrowing amount will depend on several factors, including your equity and your financial situation. The amount you can borrow totally depends on the lenders criteria. There are some lenders on the market that are willing to lend more than others but this is dependant on your income and personal circumstances.
How much will a remortgage for home improvements cost?
Mortgage rates and fees can vary, though as your mortgage broker we will inform you of these. As well as the cost of materials and labour, you may also need to budget for architects, planning permission, building regulation certificates and VAT. The costs of the actual work involved on the home improvements in question can also differ, depending on the services you are hiring. It is always worth getting quotes ahead of time, so that you can budget accordingly.
Go through a mortgage broker
Your current lender will want to retain you as a customer, but there is nothing to stop you shopping around. A mortgage broker has access to a far wider range of deals, some of which aren’t available on the high street, and if your equity has risen then you may be eligible for better offers than you think.
As always, there are a number of conditions to think about. If you’re currently on a standard variable rate (SVR) mortgage, or on a fixed-rate deal that’s coming to the end of its term, you should be able to do this without too much difficulty. However, if you are only part way through a fixed-rate term, you may find that ending the deal prematurely carries a financial penalty.
For further information on remortgaging for home improvements please contact us here.
