Remortgage for Home Improvements

This is when your existing mortgage is replaced with a new one, usually with a new lender, and you borrow additional money to fund your home improvements.

For example, if your current mortgage was with the Halifax and you owed £150,000, you could take out a new bigger mortgage with Nationwide for £180,000. This would leave you £30,000 in cash to fund a new kitchen project.

Following your remortgage for home improvements your mortgage payment would likely increase as you’ve borrowed an additional £30,000 that you’re now paying interest on. However, you’ve been left with a brand-new kitchen which possibly has increased your property value.

A good starting point is knowing how much your home improvements are going to cost by getting quotes from reputable tradespeople.

If your project is big such as a new kitchen or bathroom, your builder will often advise factoring in an additional 10% of budget on top of their quote to cover any unforeseen work.

The amount of money you can borrow on a remortgage for home improvements will depend on the current value of your property and the balance of your existing mortgages.

Our mortgage broker team can help you with these figures and will advise you how much you can borrow and how much your new mortgage payment will be.

If you are an older client (aged 55+) and are looking to raise money for home improvements, home alterations for assisted living or to repay debts etc an equity release mortgage maybe suitable. Read more about how equity release works and the alternatives to equity release.

The most common home improvement projects are for an extension, to create an additional bedroom, for a new kitchen or bathroom, a loft conversion, garden improvements, a driveway redesign, new doors and windows, adding a garden room, a gym or an internal redesign.

A remortgage for home improvements can be used to fun all or a combination of the above.

If you are considering a remortgage to release equity, a good place to start is by having an idea of the value of your property. You can look at both recently sold prices in your area for similar sized properties and see what’s for sale around you.

As part of the process, your new mortgage lender will do a valuation to ensure that your home is worth what you say it is on the application.

Another thing for you to consider when thinking about a remortgage to release equity is the balance of an existing mortgage or loan secured against your property. Our mortgage advice team will help you with this one.

Moving house can prove expensive so more clients are choosing to improve their own homes via releasing money on their mortgage instead. This saves lots of money such as estate agency fees and stamp duty.

If you are doing a large project in your home such as adding a new bedroom or extension, this can also add a lot of value to your home once completed.

You get to enjoy your new revamped house and at the same time have peace on mind that you own more equity.

The risks of a home improvement remortgage include, under-estimating the amount of money your project will cost, your property being down valued therefore not being able to borrow enough, and falling into negative equity in the future.

This is why seeking great mortgage advice is important.

It’s a complicated application and your mortgage broker will need to consider which product/s are best for you, I.e., a further advance mortgage, a remortgage, a second charge mortgage/secured loan or, for older clients an equity release/lifetime mortgage.

These are just some of the risks involved, it’s our job as trusted mortgage advice experts to run through all the risks involved based on your personal situation.

As mentioned above, it’s always best to factor in a buffer of 10%, if possible, with the bigger jobs to cover any unforeseen work that is required.

With your new mortgage, there’s a lot to consider such as your current mortgage interest rate, whether you are part way through a fixed rate, how much equity you have, your future, your affordability and income type and attitude towards risk.

Having a reputable mortgage broker, like us, on your side will ensure you are getting the best possible advice and that you’ve shopped around 1,000’s of deals and got the best one for your individual situation.

Standard documents such as 3 months proof of earnings, ID and 3 months bank statements, quotes for work etc are required for a remortgage for home improvements. It’s normal for other ad-hoc documents may be requested during the application process; this will vary by lender.

Also, as part of your free consultation, we’ll ask you some questions that include basic personal information like name, address, salary, and any existing credit/mortgage details, plans for the home etc. This information will allow your mortgage advisor to answer all your questions accurately.

Generally, the full process takes about 3 months until you receive your money. Although, the length of time does vary per mortgage lender.

Our mortgage broker team aim to have secured you a mortgage offer within approximately 3 weeks; the rest of the process is in the hands of your conveyancer.

Most clients prefer a fixed rate mortgage deal, typically over 2, 3 or 5 years depending on their personal situation and attitude towards risk. Clients usually like the security of knowing exactly how much they are paying per month for budgeting purposes.

A variable rate mortgage maybe recommended by our mortgage team in certain individual situations.

Bad credit such as a ccj, default, missed payments or simply a low credit score are usually hurdles that we can overcome.

It’s usually harder and you’ll need a great mortgage advisor on your side, however, it is possible to remortgage with bad credit.

Generally, the more equity that you have in your property that you are looking to remortgage for home improvements the easier this is.

The fees associated with a remortgage for home improvements, include new mortgage arrangement fees, valuation fees, legal fees, and potentially early repayment charges if you’re in a fixed rate deal.

Your mortgage advisor will run through all these with you upfront, so they’ll be no surprises along the way.

Usually, your new mortgage lender will allow you to make regular overpayments on your new mortgage. The amount you can overpay by will be on a lender-by-lender basis.

Making regular overpayments if you can afford it could significantly reduce the amount of interest you repay over the mortgage term.

Typically, if you’re on a variable rate mortgage or when your fixed rate has ended, the overpayments tend to more flexible and can be larger amounts.

When doing a remortgage to release equity, how much you can release will depend on your property value and any outstanding mortgage or loan secured against the property. Also, your affordability, age and credit score will be considered by the new mortgage lender.

You’ll need to have an idea of how much you are wanting to fund your home or garden projects such as quotes etc.

Don’t worry too much about the above as our mortgage advisor team will help and guide you through the whole process.

Generally, the longer that you’ve owned your home and the more equity that you have, the more you’ll most likely be able to release.

Yes, sure. The mortgage world has been brilliant for innovation in this later life lending area over the last few years and a lot of products are now available to help, including interest only mortgages and lifetime mortgages where no monthly repayments are required.

Our specialist later life mortgage advice team will be able to answer all your questions. You’ll be surprised what mortgage products are now available to older borrowers, even with a poor credit score.

If you are considering a remortgage for home improvements and you’re in the middle of a fixed-rate deal, it’s important to seek great mortgage advice so you know all your options.

Our mortgage team will need consider you’re the rate and time left with your current mortgage lender and any early redemption charges.

Your mortgage recommendation will include exploring any options that are available with your current lender such as a further advance, moving the full mortgage plus any new borrowing to a new lender, or a second mortgage (often called a secured loan or second charge) on your property.

As part of our mortgage advice process, it’s important that we consider all the above options, and that you understand the pros and cons of each route. We’ll recommend the most cost-effective way forward for you.

Your mortgage broker will run through all the options with you and recommend the best remortgage product for you. Our team will run through your interest rate, whether it’s fixed or variable, and the length of the mortgage term so you have a full understanding of your new mortgage.

Whether you are a sole trader, a partnership, or a limited company owner, with a minimum of one year’s trading you’ll have remortgage for home improvement options.

It’s usually harder with a self-employed client compared with an employed one. If you are self-employed, a mortgage brokers help with be really beneficial throughout the process.

If you are aged 55-99+ and receiving pension income, you’ll have several options to consider if you are wanting to use equity from your home for home improvements. These include retirement interest only mortgages, and equity release plans.

Also, some products will also be available that do not require you to make a monthly payment. The interest rolls up with these equity release mortgage types. These mortgage types are also available with a poor credit score.

Usually, a fixed rate mortgage will include early redemption charges during the fixed period. These charges will be documented clearly on your mortgage offer.

A remortgage for home improvements should be considered by you as a long-term commitment. Mortgages are not designed to meet any shorter-term borrowing needs. There are other products available such as personal loans and bridging finance etc for these situations.

Alternatives to doing a remortgage to fund your home improvements include, moving home to one that doesn’t need work, paying for your home project via a personal loan or credit cards, borrowing off family or simply staying as you are until you feel the time is right to proceed.