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An extension of your mortgage involves borrowing an additional sum from your existing lender. You could use the funds for instituting essential home improvements that could enhance the value of your property. It is crucial to consider several aspects related to extending a mortgage.
If your lender offers an advance at competitive rates, you may take advantage of the option presented. A refinance may not be advantageous, if the rates are not lower than your current mortgage. In addition, a refinance involves an arrangement fee and new closing costs. Before settling on an extension of your mortgage, consider the terms of a personal loan. It is sensible to check on all options presented by the loan market.
You must take on the services of a property appraisal firm to estimate the worth of your home. It is important to have considerable equity in the home before taking on an advance from your lender. In addition, you must have a favourable credit report. Work out the additional monthly recompenses to ensure that you can afford them.
It is sensible to work out how much you can afford before deciding on the restoration projects. Speak to your lender to know about the process. Enquire if you need to repay over the full term of the mortgage or over a shorter period. Determine if you need to pay fees for extending the loan. If your existing mortgage is a flexible loan, you may not incur any cost for getting an advance. Calculate the extra cost of borrowing after factoring in the interest rate for the advance.
Lenders generally agree to an advance, if you have equity in the house. Some lenders impose a mortgage indemnity premium for the extension, which can be expensive. Take care to ascertain this factor before asking for an extension.
Choose renovation jobs that will make your home more habitable and enhance its worth. Carrying out roof repairs and applying a fresh coat of paint are essential refurbishment tasks. Converting a loft into a bedroom of modest proportions can add to the value of your home. However, you must think carefully about adding a swimming pool in your backyard. If you intend to sell your home, potential homebuyers may deliberate on the costs of maintaining it. It is crucial to decide upon refurbishment jobs according to the additional funds available.