Remortgage for Home Improvements

Generally speaking, towards the end of your initial fixed period on your mortgage, you'll be looking to remortgage your property. Some do this for a better rate, some are looking to consolidate debts, whereas others may be looking to remortgage for home improvements.

This works the same as remortgaging to release equity, wherein the mortgage lender will allow you to release a portion of the equity within your property (the difference between the value your property is sitting at currently, and the remaining balance of your mortgage).

Along with any changes to your personal circumstances, they will calculate what you can release, which you can later use to cover the costs of the works you are looking to have done on your property.

There are a lot of reasons as to why someone may look to remortgage for home improvements. Whether it is for work reasons, a growing family or something else, you may not want to up and leave the home you have built up and grown to love.

Popular choices for a remortgage that we hear for people looking to remortgage for home improvements, is for extensions, extra bedrooms, a loft conversion, home repairs, home offices or new kitchens.

If you are a buy to let landlord, you may have the option of a remortgage for home improvements on a property that is in your portfolio.

We regularly help landlords in remortgaging their properties, with many of them coming back to us for our services in finding the right mortgages on the rest of their property portfolio.

Most people will not have the option of making home improvements prior to a remortgage. The creation of an extension or home office can be varied when it comes to cost. Unless you have savings to do this upfront, you'll need to raise these funds.

If you do make any home improvements to your home in advance, you may potentially be able to access a better loan to value based on what the property is going to be worth once the works are completed.

Mortgage rates and fees can vary, though as your mortgage broker we will inform you of these. As well as the cost of materials and labour, you may also need to budget for architects, planning permission, building regulation certificates and VAT.

The costs of the actual work involved on the home improvements in question can also differ, depending on the services you are hiring. It is always worth getting quotes ahead of time, so that you can budget accordingly.

If the project that you are planning is quite a large one, such as a home extension and you are looking to raise the funds for this, lenders will most likely want to see quotations for the works that you are looking to have carried out.

It is entirely your decision as to whether or not you remortgage for home improvements or seek an alternative. One of your options may be a personal loan. This tends to be more costly than a remortgage, as the latter will have you spreading the cost over the length of your mortgage term.

Remortgages are secured against your home, whereas a personal loan will not be - This is important to remember. Additionally, a secured loan may be an option. This is a loan that is secured against your main asset, being your home.

Secured loans are more risky, as failing to maintain this and your mortgage payments could see you at risk of losing your home. A further advance with your existing mortgage lender may also be a possibility.

In any of these situations, it is worth your time weighing up the costs before making any decisions, so that you can put yourself in the best position for making the home improvements you would like to have done.

If you are an older homeowner, you may have the option of a lifetime mortgage. This can allow a homeowner to release a tax-free lump sum from their property, to cover the costs of their home improvements.

A lifetime mortgage can represent a good option for older borrowers as the amount you can borrow is not determined by your income but by your age and the value of your home. You can also have the ability to make payments on a voluntary basis.

It is important to remember that releasing funds in this way will reduce the amount of equity available in later life to leave as an inheritance or should you need to rely on this to pay for care.

Please visit our page to learn more about equity release or alternatively, get in touch, speak to an advisor and ask for a personalised illustration to understand the features and risks of a lifetime mortgage.

They will also talk you through the alternatives such as downsizing and looking at grant funding.