The Christmas decorations are down and thoughts often turn to DIY and home improvements, but these improvements will need paying for. Did you know that you can use the equity in your property to release money for this purpose?
Equity is the part of the home that is not mortgaged. For example, if your property is valued at £250,000 and you have a £100,000 mortgage, your equity will be £150,000. There are lenders out there that will lend you up to 90% of the value of your home, so in this case £225,000 which would effectively release a further £125,000 subject to all the normal credit and affordability checks. It’s really important to think carefully before remortgaging your home, because the loan is secured against your property. Whether prices go up or down you will still be eligible to pay back the whole amount (your home is at risk if you fail to do so).
If you’re currently tied into a deal with a big redemption penalty, it may make more financial sense to take out a further advance. This means that you effectively have two separate mortgages running on your property, which can mean that they will be on different rates and have different end dates.
When remortgaging for a higher amount or taking out a further advance, lenders will ask what you require the funds for and may even ask to see the quotes. Having all this information available can speed up the process.
Whether you are considering a new kitchen/bathroom, extension or loft conversion or even just a bit of updating, your property could help you realise your dreams.
