Do you want to improve your home but are unsure how to fund it?
Improving your home will not only mean you can finally get the loft extension sorted, or add a conservatory for those longer days, but it will also improve the value of your home in the process, meaning when you do come to move home or downsize, your property will fetch a significantly higher price.
Remortgaging to borrow against the equity in your home
If you have equity in your property, then remortgaging is a good way to release the equity to enable you to carry out the home improvements.
If your property has significantly increased in value since initially taking out a mortgage, you could remortgage to access the increase.
For example, if your home was initially worth £180,000, but is now worth £250,000, your property has increased in value by £70,000.
Say you had £100,000 left on your initial mortgage, owed to the original lender, you would then take out another mortgage of a higher amount, for example £130,000.
This would then leave you with £30,000 as you have sold this amount of your equity. So instead of owning £100,000 of the new value of your property, you own £70,000.
What else is there to consider?
You must first work out if your property has increased in value, and by how much. Borrowing this way will mean you will be paying more interest on a higher amount, so you will need to work out if it is worth it, and if you can afford it.
There is also always a risk associated with improving your home through remortgaging, which is why it is imperative to speak to an expert mortgage adviser.
Click here to speak to one of our expert advisers to discuss improvements to your home.