Remortgaging for Home Improvements
A house needs regular care, a few wear and tears can crop up and balancing day to day life along with a to-do list of home improvements can be a hassle.
But the benefits that can come with home improvements can be rewarding but they can carry a bit of a cost.
Why improve the house?
For some homeowners, they may feel that their house needs a re-do.
To raise the funds needed for a revamp, homeowners may remortgage their property by securing a loan against their home. A byproduct of this is the generation of profit for the homeowner by adding increased value to the property.
Applying for a remortgage
To apply for a remortgage, you will need to still be in your current home and any current circumstances will be looked over and considered.
Prior to applying for a remortgage it may be wise to speak with a mortgage adviser to check if it’s financially viable for you to remortgage.
Considerations
Before embarking on remortgaging, there are a few things to think about.
- Affordability
You must provide the lender with evidence that you are able to afford the repayments. From this the lender will review your financial situation and commitments when making the decision.
The amount you can borrow is dependent on the criteria of the lender. If you have spoken to your mortgage adviser then the appropriate plan will have been identified.
- Credit History
Lenders will take a look at your credit history to see any other payments you might be making currently.
- Home Improvement costs
The lender will examine the money you will require to complete these home improvements. In the assessment, costs like labour costs, planning permission and material costs to name a few will be considered to ensure you have the right amount and that you can pay it back.
- Equity amount
The lender will factor in the amount of equity that has been accrued in the property. The amount of equity increases if you have been living in your home for a few years and monthly fees have been paid as well as the valuation of the property.
- Personal circumstances
For some homeowners, the circumstances since getting their previous mortgage may be changed. If this is the case, the lender will consider this regarding affordability. This is so the lender is assured you can repay the increase of repayments if you decide to remortgage.
Again, speak to your mortgage adviser to find the best option for you, whether you’re looking to improve your house (extension etc.) or using it as an investment for the future.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
