How can I fund Home Improvements?

By John Cossons, Mortgage and Protection Designer at Anstee & Co.

As more people are working from home, and it is appearing likely that many will continue to do so, house prices are increasing and there is currently a lack of properties available for sale. So, more people are considering improving and extending their existing properties. The question is how the Home Improvements are going to be funded?

What are my options?

With current mortgage interest rates starting at below 4%*, raising the money from the equity within your property is worth considering.

There are several options available, you just need to decide which one is right for you-

A further advance

You could consider a further advance from your existing lender. This is often done if there is a penalty for repaying your existing fixed-rate mortgage early. The additional loan would usually run alongside your existing mortgage and could be at a different rate. Also, any fixed-rate products will probably have a different end date to the existing mortgage.

Re-mortgage

You could consider re-mortgaging your home. This is where you change lender and borrow enough to repay your existing mortgage and have sufficient funds left to complete the home improvements. This may still be a loan of two parts, but the interest rate and product end dates would usually be the same. The interest rate may be lower than what you are presently getting.

A second charge loan

You could also consider a second charge loan. This would be a new loan, secured against your property, in addition to your current mortgage. The rate is likely to be higher than a further advance or re-mortgage but could be worth considering if there are high early repayment charges from your current lender, and your current lenders are not prepared to offer you the additional funds.

What do I need to consider?

You need to be aware that with all these options you will have secured the additional borrowing against your property and that the additional payment cost could increase over the term of the mortgage which may be up to 35 years.

If you do not want to secure the additional borrowing against your home, you can consider an unsecured loan from a bank or other lender. These loans are usually fixed for the duration and have a maximum term of up to seven years. The monthly repayments are typically higher because of the reduced term so you should ensure that the payments will be affordable.

*Remember, that the lowest rate does not always provide the best overall deal for your circumstances.

How Anstee & Co can help you fund Home Improvements

We are a firm of Independent Mortgage Brokers. This means that the mortgage advice we provide is unbiased. Being independent means that we look at all the financial solutions available to you. To find out if we can help you why not contact us today. The first “getting to know you” meeting is at our cost and is without obligation. Our Head Office is located at-

• Kettering, Northamptonshire

Our Mortgage Advisers  live and make use of meeting rooms  in-

• Thrapston, Northamptonshire
• Northampton, Northamptonshire
• Wellingborough, Northamptonshire

Additionally we make full use of video conferencing facilities such as-

• Zoom
• Microsoft Teams
• Facetime

Also, we can arrange a conference telephone call. The choice is yours. There is no need to visit an office as all work can be handled remotely. Why not contact us today to see how we can help you fund your Home Improvements.

If you have any thoughts or comments on this article, “How can I fund Home Improvements?”, then we would love to hear from you.

Finally, the information contained in this article is for information purposes only and does not constitute financial advice. Anstee & Co. is authorised and regulated by the Financial Conduct Authority (FCA).

AS A MORTGAGE IS SECURED AGAINST YOUR HOME, IT COULD BE REPOSSESSED IF YOU DO NOT KEEP UP THE MORTGAGE REPAYMENTS.