subject: A Remortgage Could Make You Thousands of Pounds [print this page] A Remortgage Could Make You Thousands of Pounds
The housing market is still under siege, with prices still falling and lenders not lending, leaving many who've wanted to move for a while now stuck in limbo, having to stay in properties they have wanted to move out of. Though this has led to a growth in people enhancing their property, from just giving it a good paint to adding conversions and extensions, making it more attractive for a future date when the market picks up.The most common financing tool to use is a remortgage, moving to a different lender from your current one is an option if it secures you a better rate and by taking a remortgage you can borrow extra money to fund any renovations you have planned, as remortgages have no upper ceiling on how much you can borrow. When work is completed, your house will slowly rise in appreciation thanks to the improvements, nothing comes without catches however, so here are a few things that you should always have at the front of your mind.Find out how much you can borrowFirst things first to figure out how much you can borrow to remortgage and refurbish or redecorate your home, which is determined from the current value and the estimated value after the improvements are completed, in addition your income and credit rating are also taken into account.Make sure you accurately estimate the cost of the improvementsWhen we say get a ballpark figure, it has to be as accurate as possible, with contingency funds in place for any emergencies. The better the budget and more detailed and ready for every eventuality, the better the chance of making your funds stretch and getting the remortgage authorised.Budgeting and getting quotes for even the smallest jobs is essential, as half a dozen of what seem smaller jobs soon add up to hefty amounts of cash. Channel4.com's research shows 3,250 is the sum to have a bathroom fitted, if you want to save some money and DIY it, you're still looking at 1,300, while a kitchen fitting will total around 5,000. Which? consumer group unearthed data to show replacing windows can come to 300-1k a window depending on its shape and size, and that figure is just per window, not for the entire house.Now you see why budgeting to the last penny is a necessity, running out of money before the work is completed is the worst case scenario that could happen.Value should be added with improvementsThere are two different concepts when it comes to improvements, adding value and making your home look and feel more attractive to prospective buyers. The two objectives are not always the same thing and you could get distracted and go down the wrong track if you're not careful.To drag up some facts and figures to support our case (in this case, research from a 2009 Santander report), spending thousands on refurbishment does not mean your house will increase by the same amount you spent. The research showed only 2,892 would be added to a house after spending 7,700 on a bathroom, or that a 22,600 loft conversion only added 13,038 to a property. To round off out stat attack, whatprice.co.uk found a kitchen adds a maximum of 8% to a home, so for a property worth 150k, you have a budget ceiling of 12k to make a refit financially viable. Of course this is if all work remains in budget, not including falling behind schedule or waiting for parts to arrive (we all know what builders are like!) so that is why staying in budget is imperative.Shop around to find the best remortgage dealWhen the budget is set and the improvements settled on, next stop is to actually find a remortgage deal from the banks and lenders. It goes without saying the internet is the best tool for this search, using comparison sites to find a good deal or searching Google for a good remortgage advice and a deal.Deciding on the right remortgage deal can be the tricky part with consequences you will have to deal with for years. For instance, is a secure fixed rate mortgage best or a tracker remortgage? Whatever the choice you have to make sure you can keep up with the repayments, other questions to consider are the legal fees paid by you or the lender? Will my income and credit rating pass the criteria needed? Finally, do I have an ideal LTV rate to make a remortgage worthwhile? These question are only the tip of the iceberg, so make sure you have all the paperwork ready and in place to get the remortgage process completed as fast as possible.
