How IMC Mortgage Brokers Can Help You
As a homeowner, there could come a time that you may wish to carry out some improvements or alterations to your property to both ensure that your home is looking and functioning well now, and in the future. It might be that you have considerable work to do to get everything working properly, or maybe that you are planning on adding a bedroom for a new arrival, perhaps you need to re-roof your entire home, or it could be that you are simply wanting to add more value.
Possible Home Improvement Costs
It has been noted by property experts that to stay and improve your home (for example, adding extra bedrooms and bathrooms) is typically much more cost effective than selling up and buying somewhere new.
Unfortunately, like many things in life, these home improvements come at a cost and, depending on what work that you are planning on having done, this can be a significant amount of money.
Once that you have decided that you want to make some changes or improvements to your home the first thing to do is ensure you accurately work out the proposed cost. This might involve getting a number of quotes. Depending on the scale of your improvements or alterations, some of the pricing aspects that should be considered include:
- Architect`s plans and services
- Planning permission
- The cost of builders
- Materials
- Building regulation inspections
- VAT
- Having some money put aside just in case things do not go to plan.
Once you know exactly how much money that you are likely to need, you can start to look into the options of how to get it.
How to Finance Home Improvements
There are generally two solutions to getting a lump sum of money which can be used for home improvement projects – a secured loan or a remortgage for home improvements. Each have their merits and downfalls.
Secured Loan
A personal secured loan can give you the chance to borrow the large amounts of money that you will probably need to carry out significant home improvements. As with a regular mortgage, the guarantee against non-payment is your home, meaning that your property is still used as the security and is still at risk if you are unable to make the payments.
When you are considering taking out a secured homeowner loan, it is essential that you look at the amount of the repayments to ensure that you will be able to pay them. If you fail to maintain your payments, your credit rating could be affected, or you could potentially still lose your home.
There are plenty of loan comparison websites available, but it is also advisable to speak to an expert for guidance, especially to ensure that you understand the full costs of the loan and can comfortably afford the repayments.
Home Improvement Remortgage
A remortgage for home improvements is the other main option. The home improvement remortgage process involves remortgaging your property to release the equity that you have i.e the difference between the property value and the current mortgage balance.
For example, if your home`s value is £200,000 and you have a current mortgage balance of £150000 you have £50000 of equity. Do note however that a lender will not usually permit you to take all of the equity out of your home and that they will typically work off the value of your home at the time of the application.
Remortgaging vs. Secured Loan
The main difference between a home improvements remortgage and a secured homeowner loan is that the payments will all with the same lender when you remortgage and, although not always the case, as the loan is with one provider rather than two the rates and in turn the repayments could be lower.
It is invariably the case that a secured loan company will assess your affordability in a different and possibly more favourable way to a main mortgage provider which may be the difference between you borrowing the amount you need or not. A secured loan company may also have a more lenient view of your credit rating when making their assessment of your application.
Both options have their pros and cons, and every situation is different, and this is why it is recommended to speak to an expert who understands this market to help guide you in finding the best option.
Remortgage Advice
If you have decided that remortgaging your home for home improvements is the solution for you, the first thing to do is research into what rates and mortgage plans you have available to you. It may be that it is the most cost effective way to remain with your current mortgage company or it might be that you can find a better option by a change of provider.
Either way it is worth comparing your options, and it is recommended that you contact us here at IMC Mortgage Brokers not only because we have a deep understanding of the market and what is available, but also because we can sometimes get access to exclusive rates not readily available in the market
We can then take you through the whole process whichever option in right for you.
For more information about how we can help you with understanding your remortgaging options, get in touch with us today.
