Published 21st April 2019
If you are planning some improvements in the not-too-distant future, you may be wondering whether you can remortgage your home to fund the renovations. Your alternatives, in this case, would be taking out a separate loan specifically for the renovations or using your own capital. Releasing equity from your property by remortgaging may not be the right fit for every situation, but it can help in many ways. One of the biggest advantages of using this funding method is that you are adding value to your home, making it a more worthwhile investment. With that said, it is advised to think carefully and consider all the details before rushing into remortgaging your property for any reason. In this guide, we share some tips on how to go about remortgaging in a way that ensures that you get the full benefit.
There are a few things to keep in mind if you hope to remortgage your home to fund renovation and other improvements.
Take time to do some planning.
Speak to your mortgage advisor at least six months before you want to remortgage the property. The earlier you can begin researching and planning, the better. It will help greatly to have your updated deal ready well in advance. Taking time to plan will save you a lot of time in the long run.
Choose the lender that is right for your needs.
Don't assume that you have to stick to your lender because it's easier. You might be able to reduce your monthly payments and interests by shopping around. This is, in fact, a major benefit of remortgaging. Compare various deals to find the offer and lender that is suited to your current budget and needs. If your income has increased since you first took out the mortgage, you may find that your borrowing power has also grown. Once again, speaking to a specialist can help greatly in this regard.
Consider all of your options.
Think carefully about which options are right for your current financial situation. The lowest monthly payments may seem like the best idea but one that lets you pay back the mortgage faster will give you a far better saving. Once again, this is where it can be useful to not limit yourself to your current lender. It's also a reminder of why it helps to get expert advice from a mortgage specialist.
Get a proper property evaluation.
Don't ever try and guess your property's current value. Get a proper evaluation so that you have updated information on its value. This will allow you to determine how much you are able to spend on renovations and how much you could save with your new mortgage. If the property value has increased, you will find that your loan-to-value ratio will be lower. This makes you less of a risk, which, in turn, helps bring down your interest rates.
Prepare your paperwork.
Essentially, remortgaging is much the same as applying for a new mortgage. Expect paperwork – a lot of it – and make sure that you are prepared. This is why we advise planning well in advance so that you have time to get everything sorted. Things you will need range from ID documents to proof of income and address, bank statements, and various other documents. It can be a stressful process and it certainly helps to be prepared. It's also worth noting that there will be costs involved, too. Make sure you prepare for these as well.
Home Legal Direct offers a wide range of services that are designed to help simplify the process of remortgaging. Contact us today for assistance and make sure that you remortgage your home with minimal stress.