Using a secured loan to increase space in your home
Every year many people in the UK decide to move home for one of a variety of reasons. Some people decide to move because of work location, to be nearer to loved ones, or simply because they want to move to a different area.
However, there are also many people that like the area that they live in and love their home but have to move because of lack of space – for example those that increase their family size or those that need extra room to study or run a home business.
Having to move home can be a real hassle, as it means that you have to spend time and money on uprooting yourself and your family. On top of this you may end up moving to a problematic home, find yourself living near to undesirable neighbours, or find yourself in a dodgy area, having left behind a home that you know and love, neighbours that you get along with, and an area that you feel settled and comfortable in. The costs involved in selling your home and moving to another can really add up, and include stamp duty, HIPs, mortgage arrangement and exit fees where applicable, removal costs, legal fees, valuation fees, and more.
If the only reason that you are intending to move is due to needing increased space then you may want to consider an alternative, which could work out far cheaper, could save you time and hassle, and will enable you to enjoy increased space without having to uproot yourself and move on. Taking out a secured loan will enable you to increase the size of your property, thus enabling you to remain in your home whilst enjoying more space.
With a home improvement loan that is secured against your home you can enjoy spreading the repayments over a longer term, thus keeping your monthly outgoings as low as possible. The amount that you will be able to borrow will depend on a number of factors, such as your financial and employment status, your income and outgoings, and your equity levels. You can work out your equity by deducting any outstanding mortgage or secured loan balance from the market value of your home – the figure that you are left with is your equity.
Some lenders will allow you to borrow up to the full level of your equity, whereas some will only allow you to borrow up to a certain percentage of your equity. In some cases you may even be able to borrow over and above the level of equity in your home. Depending on the amount of money that you are able to borrow you can increase the size of your home in one of a number of ways.
In order to increase the size of your home you can look at adding an extension subject to council permission. This will give you extra rooms and far more space. Another option is to make use of room that already exists but is currently unusable. This can include converting your loft space in order to use it as another bedroom or even as a study, or converting garage space. This type of home improvement can really boost the value of your property as well, so you can recoup much of the amount that you borrow if and when you sell your home.
24th October 2007
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