More people are choosing to take out a refinance on their mortgage to make their homes nicer, leading lenders to offer better deals. However, what does it entail to remortgage to renovate? This blog post will shed light on this process to help you decide if this move is right for you.
Since people had been forced to stay home during the pandemic, they have been forced to come face-to-face with all the imperfections of their houses. This has led to an increase in taking out remortgages.
If you find yourself wanting to take out a remortgage to renovate your home, here is a list of the best tips to help you make the right decision.
1 – Check that your home’s value has risen
The amount of money you can get for a mortgage when you remortgage will depend on how much your home has increased in value. If this amount has not increased significantly, it may not be a cost-effective idea to remortgage.
2 – Look into the other costs of remortgaging
It is important to ensure that you consider all the costs of remortgaging, not just the interest rate of your mortgage. Things like stamp duty and valuation fees, for example, may need to be considered before making the decision to get a remortgage.
3 – Plan work to further increase your home’s value
Think about what improvements you can make to raise your home’s value before you apply for a remortgage. This will give you the chance to increase the amount of money you can get from your remortgage. For example, you could consider renovating your bathroom, kitchen or flooring to potentially increase your homes value.
4 – Beware of early repayment charges
Remortgaging to renovate may involve a large amount of money or a further advance, and you may be tempted to get a remortgage with a low rate. However, if you do this, you may be subject to early repayment charges that will reduce the amount of money you get from your remortgage. As stated earlier, it is a must that you make sure you check with your existing lender to see if you will be subject to early repayment charges. If you are it may be worth comparing them with other lenders’ products before you apply a remortgage.
5 – Work with a reliable broker
A mortgage broker will have experience in remortgaging and will be able to find a mortgage that is the most suitable for your particular circumstances and objectives.
Conclusion
Remortgaging to renovate isn’t for everyone, especially if you are struggling financially. If you try to do this, you could end up in even more debt, which you will struggle to get out of. Be careful if you want to remortgage to renovate.
On the other hand, remortgaging to renovate is a great way to improve your home and raise its value. However, it is important that you consider all the costs involved. If you find that you can afford to remortgage, you are in a good position to get a mortgage that will give you a low-interest rate as well as money to renovate your home.
If you are looking for a mortgage advisor in Chester, come to A Move Brokers. Book a free consultation with one of our advisers. We offer a wide range of mortgage products and can help you get the best deal to suit your individual needs.
This article is for information only and should not be seen as advice or a recommendation to act. As a mortgage is secured against your home or property, it may be repossessed if you do not keep up the mortgage repayments.