If you have equity in your home and are wanting to do improvements on your property such as a new kitchen, bathroom etc, you can look into adding the additional borrowing onto your mortgage. You can do this via two different routes. One option is to find a new mortgage deal with a new lender and look at borrowing extra money. For example, if your home is worth £250,000 and your current mortgage is for £175,000 and you would like to raise £25,000 for a new kitchen etc. You can apply for additional borrowing and add the £25,000 to your mortgage. You can then use the £25,000 on the work you want to do.
Another option is for you to do additional borrowing with your current lender. If you are comfortable with your current interest rate and want to stay with your current provider they may consider lending you more money. It is important to mention that the interest rate could be different on the additional amount being borrowed compared to your main mortgage. Also, please be aware that this will be secured againt your home and you will need to ensure you can afford your monthly payments.
Remortgaging for home improvements will increase the amount you owe on your mortgage and will increase your monthly payments. You need to always ensure you can keep up your monthly payments, even when in situations such as losing your job or having less working hours etc. It is also important to consider what types of improvements will add the most value to your property. Another big thing to consider is if you are tied into your current mortgage deal as you may incur early repayment charges. For example, if you have a five-year fix, and you have 3 years left, you may find that it comes with high early repayment charges. These charges do reduce the longer you have your deal in place, however waiting until your current deal ends may be your best option unless you have the funds to pay the early repayment charges.
If this is something you would like further advice on and would like to speak to one of our experienced mortgage advisers, Book a free Initial Consultation now