A Remortgage Could Make You Thousands Of Pounds

There's been no escaping the fact the housing market in Britain has been dejected for the last few years now. House prices are set to continue their fall and mortgage products and lending are restricted as they ever have been; meaning people are finding it very difficult to move or just simply can't move. That's led to more people staying put and deciding to add and enhance their current homes with improvement; these can range from large extensions and refurbishments to simply changing a carpet or repainting the walls to freshen up a room.

The most common and popular method of raising the dough for home improvements is to remortgage your property. It's possible to remortgage for more than the house is worth and switch from your current lender to one offering a better deal. If renovations and refurbishments are done shrewdly and in the right areas, expect your house to rise in price quite a bit, though there are always pitfalls to be aware of, we've written all you need to know to get started here.

Investigate how much can be Borrowed.

Before you go planning solid gold taps in the bathroom and a swimming pool in the garden, you need to approach lenders and see how much can be borrowed and what rates you are likely to get. Once this has been established, you can then set your budget and plan in detail the sections of the property you want improved.

Make sure you accurately estimate the cost of the improvements

So you know how much equity will be needed through remortgage, you will have to estimate, with great care, the costs of all planned improvements. Establishing a ballpark budget will help with planning all the other steps that come after.

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.

So get that budget figure and stick to its limits come hell or high water, so you don't have to go back hat in hand to the bank.

With improvements should come added value

There 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.

To get the best remortgage deal, shop around

Obtaining a remortgage deal is the last step to complete, following a solid budget being established and the home improvements being settled upon. These days, the best first step is always to log on to a price comparison website to find the best deal on the market, failing that, searching round the net for a independent/smaller lender might turn up a surprise or two.

Before settling on a remortgage product, many questions have to be considered to not make it a waste of time, questions such as fixed rate or tracker mortgage? Will your credit rating pass the checks? Will your income and LTV rate be sufficient to pass a lender's criteria? Acquiring a remortgage can be a long drawn out process so go in ready to and know what to expect to speed the process up.