Use The Financial Muscle of a Remortgage To Install That Dream Kitchen You Always Wanted

The kitchen is the perfect place to start if you want to add value to your home.  Indeed, property guru and TV personality Phil Spencer told a national newspaper in 2010 that the kitchen should always be your choice if you are only going to improve one of the rooms in your home.

So in what practical ways can a new kitchen add value to a family home? A new kitchen can give you and your loved ones some extra living space by better managing your storage and making better use of the floor space available. An added benefit of this is the fact that the kitchen is one of the most popular rooms with potential homebuyers. This means that a new kitchen is the one investment most likely to make your property more appealing to prospective buyers.

Consumer watchdog Which? has discovered that the average cost of a new kitchen in the UK is £8,000.  Even low cost kitchens can set you back over a thousand pounds, whilst a designer kitchen including fittings and appliances can easily cost in excess of £30,000.  So, refitting your kitchen can be a costly project.

Few people have the cash to fund a new kitchen and so finding the money needed to undertake the work may be your first step.  Whilst many people consider loans or credit cards to fund the work, a remortgage is one of the most straightforward and cost effective ways to pay for your dream kitchen.

When you remortgage you switch your home loan from one provider to another.  Your existing mortgage is repaid and you take out a brand new mortgage with a different bank or building society.  And, as part of this switching process, you can normally apply to increase the size of your mortgage to cover the cost of the home improvements you wish to undertake.

You do however, need to have sufficient equity in the property in order to borrow the additional funds in order to refurbish your kitchen.  You can usually borrow up to 90% of the value of your property; however you should beware that this may cause the interest rate to be higher.

In addition to having some equity built up in your home, the remortgage is also based on your monthly incomings and outgoings. Lenders are traditionally risk averse and are exceedingly so in the current financial climate so they will have to be convinced that the loan is affordable to you.  Normally this process is straightforward, often if your new mortgage repayments are less than those which you have been paying for several years.

Another key advantage of choosing remortgaging as an option is the fact that you can generally borrow both your main mortgage and the extra finance that you need for your new kitchen on a very competitive rate of interest. Most high street lenders offer extremely competitive fixed and discounted interest rates to entice borrowers into switching banks and in some instances they will also often pay some or all of the additional costs that inevitably rack up in the remortgage process, such as a valuation or the standard legal costs.

It is important to remember however, that when you are remortgaging your home to update the kitchen that you should not overspend on the project and to ensure that the refurbishment is adding enough value to the property for it to be worthwhile. For example, there it would not be sensible to pay for a £30,000 kitchen on a house that is worth £100,000.

Whether you are trying to make your home more attractive to buyers or you are trying to increase its value, a new kitchen can be the perfect answer.  And, a remortgage can be a great way both to obtain the finance that you need and to benefit from a great mortgage deal.

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