Remortgaging to fund home improvements
From raising the value of your property to giving your family more space, there are lots of reasons to renovate. You could have a new bathroom in your plans, or you want to create the kitchen of your dreams.
But how to pay for it? re-mortgaging is one method of borrowing money, while getting a new mortgage deal with a different lender.
Considerations before mortgaging to pay for home improvements
You’ll owe more on your mortgage
Owing more on your mortgage may not seem like a big deal in the short term, but you should think about the future, too.
If you were to have less money for any reason – job loss, fewer working hours, a new family – this may affect your ability to keep up to bigger mortgage repayments. When you consider borrowing, think about how this will impact the amount you owe to your mortgage lender. You’ll pay interest on the amount you borrow too, so it’s not just the capital you’re borrowing.
Early repayment charges
Early repayment charges aren’t an insignificant fee, and in most circumstances you’ll want to avoid paying one. When you’re remortgaging, making sure you’re not tied to a current mortgage deal could mean you’re able to avoid paying one. Read your mortgage agreement carefully to check.
Renovate for the right reasons
While it may seem like a good idea, renovating to improve the value of your home before a sale isn’t guaranteed to work. You could end up paying more for the work than the value it adds to your property.
Turning cellars into living spaces, converting garages into useable space, updating your bathroom tend to be good options for adding value to a home.
Increasing your kerb appeal with minor work on the front of the house can be a cheaper way to improve your home’s value. Research the market, or seek advice, before carrying out major building work.