REMORTGAGE TO PAY FOR AN EXTENSION
This is one of the most common questions when it comes to remortgaging “Can I remortgage to pay for home improvements”, and it in the short of it, the answer is yes.
But yes comes at a cost and making this decision shouldn’t be done lightly.
When it comes to remortgaging there are numerous factors to consider and the biggest one that often gets overlooked, is what happens in the long run.
Yes, remortgaging can put you in a good financial position now, but what about the long run?
You have to consider that remortgaging may overall end up costing you more in the future, and if you have accepted this then you are ready to apply.
It can also be especially worth it if you have dreamed of these home improvements and have weighed up the pros and cons.
If remortgaging is right for you then taking a cash lump sum out to get an extension could be a perfect solution to your problems.
It means you don’t need to take an additional loan out and can enjoy the equity from your own home.
If your current home has gone up in value and you’ve paid off a reasonable chunk on your current mortgage, then remortgaging could be ideal for you.
It can give you the financial flexibility and freedom to do things such as an extension.
As long as you have equity in your home and can afford the repayments, then remortgaging for home improvements could be for you.
A hypothetical example of a home improvement situation could be that your current property is worth £400,000. You want to use £30,000 to knock a wall down and extend the back of your home.
If you switch to a new mortgage of £430,000, then this will provide you with enough money to pay for your extension and then you are able to devise a new payment plan for your new mortgage.
Due to the costs of extensions, remortgaging is a more popular option than opting for a loan as if your property value has gone up, you are more than likely to receive better rates for borrowing additional money and paying it back at a better rate.
Remortgaging is definitely something to consider if you feel it is suitable for your financial circumstances.
Always consult with a financial advisor for the best advice going forward.
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Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.