How to renovate your home with a remortgage
If you’ve found yourself a little penned in more than usual, you’ve probably thought about doing a spot of redecorating. Many people are now deciding to renovate and extend their homes than move to a new home, and it’s likely you’ve done the same!
The good news is that funding your renovation project may be easier than you think. Whether you’re planning to do a loft conversion or extend to make room for a new home office, you could fund your renovation by remortgaging.
Here’s how to do it!
Work out how much it will cost
When you’re considering extending your home, the first step is to find out how much it will cost you to do it. Which is why we’ve created a home renovation calculator to give you an idea of how much your renovation is likely to be.
Just pop in your postcode and answer the following questions:
- What type of property do you have?
- Which part of the property will you be renovating?
- How much is your property worth and how much do you pay on your mortgage?
- How much space will you gain and what will it be used for?
Just like that, the calculator works out how much it will cost to renovate your home. It’ll even work out how much extra you’ll pay each month if you choose to remortgage to fund the cost of the project.
You may find that creating your ideal home adds only a small amount to your monthly mortgage payments. And if your home has increased in value since you took out your last mortgage, you may find your repayments don’t increase at all.
If you’re still unsure, have a few questions, or are ready to get started, our expert team of mortgage advisers are here for you whenever you need them. Feel free to get in touch with us here.
How do I remortgage to renovate my home?
A remortgage is where you arrange a new mortgage with a new lender. If you’re planning home improvements, you can release some of the equity in your home through a remortgage and use it to pay for the costs of the renovation.
However, there are a few things you should take into consideration:
- Early repayment charges - if you want to leave your current mortgage deal before it ends you may need to pay an early repayment charge. So, find out if that’s the case as you’ll need to factor this cost into your calculations.
- Consider any other costs - taking out a mortgage can involve needing to pay fees including an arrangement fee, a valuation fee and a booking fee. These should also be included in your calculations.
Our expert team of mortgage advisers will be able to talk you through all of your available mortgage options, and any additional charges/costs you may incur.
What if I want to stay with my current lender?
Another option may be to consider additional borrowing from your existing mortgage provider to fund your project. This may be a good option for you if you’re tied into a fixed term mortgage and would need to pay early repayment charges if you switch deals before it ends.
However, we’d recommend you speak to your mortgage adviser about what would work best for your individual circumstances.
What are the benefits of renovating?
The big question on everyone’s lips – how much value could you add to your home? As well as being able to create more space in your home for you to enjoy, renovating your home can be a good way to climb the property ladder without needing to move home (assuming that the renovation increases the property’s value).
You need to bear in mind that the increased value of your home will entirely depend on the type of renovation you carry out. Some renovations can devalue your home, so it’s worth doing some research before you go ahead to make sure you’re not damaging your property’s market value.
For example, creating an extra bedroom can add a significant sum, especially if it has an en-suite. However, some extensions such as extending your lounging area can tend to be less profitable.
Our calculator will estimate how much value you could add to your property by carrying out the work.
How else can I fund it?
When it comes to funding your project, you should look at your overall financial situation.
If you have savings that you can afford to put towards the renovation, you may consider using them. If you’re then to remortgage, you could afford to borrow a smaller amount. Alternatively, you may choose to save the cash to pay to furnish your new space.
That’s it! A few simple steps, tips, and titbits can have you well on your way to building the home of your wildest dreams. All for a price that’s affordable to you.
We do mean it when we say if you have any questions, or just fancy a chat about anything mentioned above, we’re more than happy to help. Give us a call and we can talk you through all your available options.
Because we play by the book we want to tell you that…
Your home may be repossessed if you do not keep up repayments on your mortgage.
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.