According to a new report by TSB, 31% of people in the UK are planning to take advantage of the current low interest rates and remortgage their home in 2017.
One of the main reasons for doing so is to make major home improvements, such as with a loft conversion or extension. Not only does this create additional living space in the shape of a new bedroom or office, it will also add value to the property and save money in the long-run.
Is a Remortgage Worth It?
Remortgaging involves obtaining a loan to pay off the original mortgage with the intention of providing a better deal on the new one. It is not classified as an additional mortgage on the property and there’s no limit to how many times it can be done.
According to the TSB report, many homeowners remain unaware how beneficial a remortgage can be. Over half of those asked weren’t able to identify the Bank of England base rate (currently 0.25%), with 15% claiming the process hadn’t even crossed their mind.
By streamlining the mortgage debt, hundreds or even thousands of pounds can be saved each year. However, there are various external factors to consider, such as whether variable or fixed rate APRs are preferential, as well as if early repayment charges will make the process worthwhile at all.
It’s certainly something worth looking into however, and if it makes financial sense, there’s no reason not to go ahead.
Home Renovation Benefits
Lenders will want to know how the remortgage money will be spent before they approve an application. If the answer is to build a new home extension or add a loft conversion, they’re likely to react in a positive manner.
This is because home renovations are a sound investment. Based on a Nationwide Building Society report, they can increase the price of your home by up to £42,000, with an additional bathroom boosting its worth by nearly £10,000.
Extensions and conversions are favoured for various reasons. Instead of moving home completely, you’ll be creating additional living space without the usual hassle and expense of a property purchase. For growing children especially, this is a fantastic alternative and provides stability for the family as a whole.
If the construction is undertaken by a professional conversion specialist, you’ll be protecting the initial outlay even further. This is because they guarantee the building work complies with planning regulations, stays energy efficient and maintains the original property aesthetic.
Remember, remortgaging many not work for everyone and much depends on your personal circumstances. However, if the conditions are right and additional funds can be acquired, home improvements are a sound investment as they increase living space and boost the property’s resale value.
If you’re interested in a conversion or extension, find out how these home improvements can keep the peace in your family.