How to Raise Money Against Your Home To Create Luxury Kitchen Or Extension
Are you interested in extending your home and making a little more luxurious? The answer is likely yes. Unfortunately, home improvement projects are too expensive for the average British family. The good news is that there are some alternatives out there. If you cannot afford a new kitchen or extension, you should consider borrowing money against your home. Within this comprehensive guide, you will learn how to raise money against your home.
Mortgaging The Home
First and foremost, you should understand that remortgaging your home is likely going to be your best bet. Taking out the mortgage on your current home is a good option. If you want a better rate and your current mortgage deal is about to end, you can always remortgage. You should also think about remortgaging if your home’s value has increased significantly during the past few years. Just remember that remortgaging isn’t right for everyone. In fact, it comes with many negatives. Some will agree that the pros outweigh the cons, but this is something that you’ll need to decide for yourself.
If you’re looking for a mortgage, you should first familiarize yourself with the risks. First, you should understand that remortgaging will stretch your debts and make them last significantly longer. This will also increase the overall cost. Also, you should realize that remortgaging could very well put your home at risk. If you do not keep up with the payments, there is a possibility that your home could be repossessed in the future. Finally, you need to know that there are many fees associated with remortgaging. Consider all of the pros and cons before making your decision. You may find that it simply isn’t worth it.
Understanding A Home Equity Loan
When it comes to tapping into the equity of your home, you have two main options available to you. The first is a home equity loan (HEL). Your second option is a home equity line of credit (HELOC). In order to understand which option is best for your situation, you truly need to understand what each loan has to offer you.
A home equity loan is really nothing more than a second mortgage. You will receive a lump sum of money from the bank, but you will be required to pay it back with a fixed interest rate. The interest rates, the time in which you will pay back the loan, and the method of payment is all agreed upon when you first apply for the loan. However, most banks or lenders will expect you to pay back the loan within 10 to 15 years.
Renting A Room
If you have a big house, there is a chance that you have a spare room or two. This can be very beneficial for you. Renting out the room is a good way to earn a little extra money and that money can be put towards your new kitchen or extension. Just make sure that you’re willing to live with a total stranger!