Is it worth remortgaging?

Many of you may feel that you’ve waited long enough for some resolution to Brexit and "is it worth remortgaging?". Either way, you may simply want to proceed with long-planned Home Improvements.

For many, improving your home is a balancing act. First, to identify and cost out what works best for you, and your family. Then how that may play out in adding value to any future property sale.

Adding extra space to your home tends to be the most financially lucrative. Whether that’s building upwards, with a loft conversion, adding an extension, installing a basement, or converting the garage.

Lofty Ambitions

Loft Conversions

Is it worth remortgaging to build up, out or down?

According to the Royal Institute of Chartered Surveyors (RICS), for example, more than a million homes in the UK now have loft conversions. The market is growing by an estimated 10% each year. Estate agents calculate that an average loft conversion costs around a third of the price of moving to a property with an extra room. That answers the question – is it worth remortgaging?

In fact, turning your attic into usable space could increase the value of your home by as much as 25%. This is particularly so if you are adding an extra bedroom and a bathroom. (Source: RICS, Guide to Home Extensions)

If you’re looking to build outwards with an extension, then the temporary rules that allow homeowners in England to do this without seeking planning permission have now been made permanent. It encompasses building a single-storey rear extension on their property of up to 6m for terraced and semi-detached homes. This increases to 8m for detached homes. Although, neighbours will still be consulted and can raise objections.

Within the existing structure, some may want to modernise the kitchen which is a focal point for many homes. That way they can take advantage of the increasingly innovative storage and appliance solutions.

Consider the basics

Before you embark on obvious pleasing developments, consider any structural problems, such as a leaking roof, or that the electrical system is sound. Get them sorted first, as it would be a lot more disruptive if that’s done after the event.

But remember, no matter how much you spend there is likely to be a ceiling value that’s partly framed by local property prices.

Getting the funds

Depending on the amount you require, the two obvious routes are remortgaging to secure a larger loan amount, or seeking an additional loan, such as a second charge on your property. You may opt for the latter if you face a hefty early repayment charge on your existing mortgage deal.

Conversely, if you feel you’d struggle to raise more funds, then assess your current mortgage. If you’re on your lender’s Standard Variable Rate, then the savings each month from seeking out a better deal may go some way towards helping to cover the costs of the smaller jobs around your home.

So, is it worth remortgaging? If you are keen to raise funds to implement your plans, do get in touch.

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