Remortgage to Renovate explained
Home improvements such as extensions can be a good way to get the house you want without moving home.
By adding extra room to your house, you can climb the property ladder without all the hassle and expense of moving house. Or by tweaking things about your house, you can make your home work better for you meaning you can live there for longer.
The question is – how do you finance these home improvements? If you don’t have savings then it’s worth speaking to a mortgage broker like Your Mortgage Expert.
A mortgage broker like Your Mortgage Expert will go through all of the costs involved and help you understand whether it’s the most suitable option for you.
We know how these type of mortgages for home improvements work. We will do all the sums for you to understand whether you have enough value in your home to release more equity. And whether your personal situation means that you are likely to get your application approved.
You are more likely to get a successful application if you use a specialist broker like us.
YOU MAY HAVE TO PAY AN EARLY REPAYMENT CHARGE TO YOUR EXISTING LENDER IF YOU REMORTGAGE.
A MORTGAGE IS A LOAN SECURED AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.
Should you pick a remortgage or a further advance?
If you are thinking about remortgaging to renovate, we can help you with two types of mortgage lending.
Here, we go through these two financial options:
- Remortgage to Renovate
If you are not locked into a fixed term deal, or you are coming to the end of your fixed term, this is a popular option.
For example, if your current mortgage is £150,000. And you’ve costed that your extension will cost you £30,000. You could apply for additional borrowing, and take out a new mortgage for £180,000. You can then use £30,000 on the extension.
Adding the cost of home improvements to your mortgage can be cheaper than other forms of finance such as taking out a personal loan or using a credit card.
It is worth remembering that borrowing additional money on a new mortgage deal is a long-term commitment. And you’ll repay this money back over the full term of the mortgage – including interest.
We can advise you whether lenders are likely to lend you more money and whether you will get a better rate if you stay with your current mortgage company or switch to a new lender.
- Further Advance from your current mortgage lender
If you already have reasonable interest rates or want to stay with your current mortgage provider, you can apply to them to borrow more money. Your Mortgage Broker can also help arrange this type of mortgage borrowing. How much additional money you can borrow will depend on how much of your mortgage you’ve paid off, or whether your home has risen in value.
It’s important to note that the interest rate could be different on the additional amount borrowed, and as with remortgaging, it will be secured against your home.
If you want to talk through either of these options for remortgaging for home improvements, then please get in touch. You may also find it useful to read our Guide to Remortgaging to Renovate.
Important things to remember
Here are some things it’s worth you considering:
- If you’re increasing your financial commitments, it’s always important to first assess whether you can afford it. And your broker will take the time to go through this with you
- You need to remember that you will be borrowing more money against your home. Added to that, you’ll probably be paying more interest and your monthly payments will increase.
- Will you need to pay an Early Payment Charge (ERC) to your existing lender? If you do, this needs to be factored into the overall costs.
- There might be some other costs or fees associated with remortgaging.
We will do all the sums and make sure you understand all of the costs involved with your additional borrowing.
Why choose Your Mortgage Expert?
At Your Mortgage Expert, we are experts in helping people to fund renovations and extensions. We will take the time to talk through your financial circumstances and advise on the option for you.
We are a family run mortgage broker based in Salisbury. But we can help you no matter where you live in the UK. Our highly experienced team understands the often complex process for getting a remortgage to renovate. We can help explain the whole process for you and will be by your side every step along the way.
On top of this, we can also put you in touch with our local business partners to help you with your project. We can recommend architects, solicitors, builders and more.
To find out more, why not get in touch with our mortgage advice team and start discussing how you can finance the renovation of your dreams.
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Email Dan HarrisDan Harris - Mortgage Adviser
Dan Harris first started working in mortgages in 2004. Since then, he has helped lots of clients with their remortgages. Dan has great attention to detail and will do the hard work to ensure you get the best recommendation. -
Email Adam NansonAdam Nanson - Mortgage Adviser
Adam Nanson has worked in the Mortgage Industry for over 20 years. His friendly approach will mean you'll understand the complicated bits and cut through the jargon. He'll work hard to get the home of your dreams.