Do you want to loan for a renovation of your house?
There are various possibilities for financing a renovation. You could apply for an extra mortgage for the renovation. You can increase the mortgage and you can take out a personal loan or an ongoing loan for the renovation of your house.
Refurbish the renovation
If you want to renovate your house you will have to ask yourself “what does a renovation cost?” Once you know what the renovation will cost you will also know how much money you need to borrow for a renovation. If you know this then you can make a choice to take out a personal loan , a revolving credit or a second mortgage. To finance the renovation, you can also increase the existing mortgage.
Increasing the existing mortgage to finance the renovation is a frequently used option. You could use the surplus value of your house to finance the renovation. If your house is worth more than your mortgage, you can free up the difference to finance the renovation.
Private increase: If the mortgage registration at the Land Registry is higher than the current mortgage, you can apply a private increase. At that time the mortgage will have been deliberately registered higher and you have now repaid money. With the space that is created as a result, you can increase the mortgage yourself.
Second mortgage: An extra mortgage for a renovation. If you do not have extra space to loan with your current mortgage, you could take out an extra mortgage. The second mortgage will therefore close you next to your existing mortgage.
If you are going to increase the current mortgage, the lender will see this as a new mortgage. The increase will therefore always have to be checked by the lender. The mortgage must also comply with the income standards and the maximum mortgage after the increase. This must be in proportion to the value of the home.
If you are going to finance the renovation by raising the mortgage, the extra amount withdrawn is also tax deductible. You must have repaid the mortgage at least annually in 30 years.
If you want to raise the mortgage, you should also check whether it is not more sensible to cross the mortgage. You can then immediately check whether the mortgage interest you paid is advantageous.
Personal loan or a revolving credit?
If you are going to take out a loan for a renovation, you have two options next to a second mortgage or the existing mortgage. The personal loan and the revolving credit are also suitable for financing a renovation.
Personal loan: With the personal loan you know exactly where you stand in advance. You know how much interest you pay over the entire term, you can not add anything extra in the interim and the big advantage is that if you take out a personal loan for improving your home, the interest is tax deductible.
Continuous credit: If you take out a revolving credit to finance the renovation, you take out a flexible loan. The interest will vary and you can withdraw money in the meantime. With the revolving credit you therefore do not know in advance what the term of the loan will be.
You see there are plenty of opportunities for financing a renovation. Once you know the renovation costs, the choice for the loan you use for the renovation is much easier. Based on this you can decide whether you need to take out an additional mortgage for the renovation, increase the existing mortgage or apply for a revolving credit or a personal loan. In all cases, financing the renovation will make your home more valuable.