Remortgaging can be a scary concept, but increasingly, it helps homeowners up and down Britain turn their current residences into dream homes. If you need more space and don’t have the cash to fork out for an extension upfront, then remortgaging offers a practical alternative. In fact, extensions are the second leading cause of remortgaging in the UK. But how to remortgage your home? Well, first, you need to weigh up your options, then draw up a plan, then bring in the professionals to get the job done.
Getting the Finances to Build an Extension
Extensions prove far more inviting for many homeowners than shopping around for a bigger place. Why give up a great location and a home you’ve made your own when you can invest inwards and build more space? Extensions mean you don’t have to delve back into the property market, saving you time, fees, and hassle.
While they’re cheaper than property, extensions still require financial backing. If you need more capital to fund the project, you have three main options:
- Credit card
- Unsecured loan
- Releasing equity on your house by remortgaging
Credit cards give you some protection from fraud, and paying off debts does help build your credit rating. However, you may well find that mortgages have a far lower interest rate than other forms of loans. It’s, therefore, worth exploring the pros and cons of liquidating some property equity and learning how to remortgage your home to fund your extension.
The Pros and Cons
Like any major financial decision, remortgaging your home should not be taken lightly. The fine print on your mortgage can shape your decision, as it might affect the cost of remortgaging.
Early repayment fees (EPCs), arrangement fees, and increased interest repayments all add to the costs of remortgaging. On the other hand, extensions bring other financial benefits upon completion. Adding rooms, amenities, and modern construction to your home can significantly increase the property value.
According to a Zoopla study, this added value generates an average of £17,000 profit for homeowners building extensions. It’s also worth checking the value of properties like yours where extensions have been added and comparing their value to your current home. Insights like these should help you structure your plans, so you can be more confident in your ultimate decision.
Planning Your Extension
While you figure out how to mortgage your home, it’s also worth figuring out what sort of extension you’d like to build and how much it’ll cost. You can extend upwards, downwards, back and front or side-to-side. Whether you’re converting your loft or building a single-story extension, these kinds of builds average around £1,000 per square meter.
Extensions more than three meters beyond your walls, or any distance above the tallest point in your roof, also require planning permission. Asking for quotes from local contractors, on the recommendation of friends, family, or even your mortgage broker, can all help you build a robust plan for your ideal extension.
Speak to a Mortgage Broker
Whether you’re dead set on remortgaging to build your extension or you’d like to better inform your research, mortgage brokers are the people to talk to. You can discuss the fees in your contract, the fees you might incur in your next steps, and the fees you’d avoid from other routes. Speaking to a mortgage broker as you explore your options provides the expertise you need to build your dream home.