1 in 10 opting for renovations rather than moving
Amid the current mortgage and housing market, latest research shows that 1 in 10 is opting for renovations rather than moving. Adam Nanson from Your Mortgage Expert talks about why renovations can be a good move for home owners looking to maximise value from their property.
“The latest research from Together* shows that rather than moving house, 1 in 10 is opting for renovations. Often people choose to move home because they want a larger kitchen or more bedrooms. But this report has found that a substantial number of people are choosing to carry out enhancements to their house instead.
“High on the agenda is making properties more energy efficient to help reduce energy bills. With homeowners looking to install solar panels, insulation, heat pumps and draught proofing. Nearly a third plan to install a new kitchen and a further 28% want to upgrade their bathrooms.
“We often have clients who contact us because they are looking to remortgage to renovate. Home improvements such as extensions can be a good way to get the larger house you want without moving home. By adding an extra room or rooms to your house, you can climb the property ladder without all the expense of moving house.
“If you are thinking about significant home improvements you’ll need to think about how to finance these. The first thing to do is to speak to a mortgage broker like Your Mortgage Expert. These are our top tips if you are looking to remortgage to renovate:
“If you choose to remortgage your home, we have 5 top tips for taking out a remortgage to fund your renovation:
Check how much equity you have in your house
If you need to borrow a certain amount for your project, you need to have enough equity in your house. If your property’s value has increased since you bought it, and you are in the same financial circumstances, you can usually remortgage for a higher loan value. If your home hasn’t increased significantly, however, remortgaging may not be possible for the full amount you need.
Do you have any early repayment charges
Aim to remortgage at the end of your fixed term period. As switching deals mid-term can be very expensive. Speak to your broker if you want to remortgage mid term as they will check how much early repayment charge you will need to pay. In this circumstance, other options might cost you less, such as additional borrowing from your current mortgage lender or a secured loan (also known as a second charge) from a different lender.
Speak to your broker about any costs of remortgaging
Make sure you look carefully at any fees involved with taking out your mortgage. There may be things like an arrangement fee, a valuation fee or a booking fee. Speak to your mortgage broker about these fees and ensure you include them in the total cost of your project.
Check out Green Additional borrowing
Some lenders now offer products called “Green Additional borrowing”. If you’re looking to make energy efficient improvements to your home, it’s worth investigating whether you can obtain a cheaper mortgage rate. Lenders like Barclays, Nationwide and Natwest all have lower rates available for people looking to make energy efficient improvements.
Ensure your renovations increase the value of your home
As costs rise, so do the costs of extensions. Materials like glazing have spiralled in price as have other building supplies. Things like extra bedrooms and bathrooms often add value whereas larger reception rooms or garden improvements may not add as much. Speak to an estate agent or architect before commencing work about what sort of things add value in your area.
We can research mortgages from across the market and can even arrange mortgage deals that are not available by going direct to the lender. We will do all the research, find the most suitable deal and arrange the mortgage for you.
Whatever you are looking for from your remortgage, whether you want to fix your rate for two years, five years or arrange something more flexible, Your Mortgage Expert can review your circumstances and give you the most appropriate mortgage advice based on your circumstances.
To speak to a member of the mortgage advice team about your next mortgage, ring us now on 01722 322683 or complete a contact us form and let them know when we can call you back.
The information contained within this article was correct at the time of publication. It is intended for information only and should not be used as a basis for purchasing any products. We cannot be held responsible for something that was correct at the time but subsequently changes or goes out of date. For further information, contact Your Mortgage Expert on 01722 322683.