HOME IMPROVEMENT MORTGAGES

A home improvement mortgage, also known as a renovation mortgage, is a type of mortgage loan that allows homeowners to borrow money to make renovations or improvements to their property. These mortgages can be used to fund a variety of home improvement projects, from minor upgrades to major renovations, such as adding an extension or upgrading a kitchen or bathroom.

Home improvement mortgages are typically offered by lenders specialising in renovation financing, and they are typically secured against the value of the property being renovated. In the UK, home improvement mortgages are becoming increasingly popular, as many homeowners seek to improve their properties rather than move to a new home, which can be costly, stressful, and not as customised to their design specifications.

While a regular mortgage is used to buy or refinance a property, a home improvement mortgage is created to offer funds for home renovation or improvement. Home improvement mortgages are designed to cater to the specific requirements of homeowners looking to make changes to their properties and thus may have varying eligibility criteria, interest rates and repayment terms as compared to regular mortgages.

In the UK, there are various options for financing home improvements, including personal loans, credit cards, remortgaging, and government schemes like the Green Homes Grant. Personal loans and credit cards are usually unsecured, meaning that they do not require collateral. Remortgaging involves refinancing your current mortgage to access equity for home improvements, which is attractive as the interest charges are much lower.

When it comes to financing landscaping or outdoor improvements, some lenders may have restrictions on what can be funded. However, if the improvements are considered to add value to the property, it may be possible to include them in a remortgage package. For those looking to purchase a fixer-upper property, home renovation mortgages may be an option.

These mortgages allow for financing the purchase price of the property and the cost of the renovations. Eligibility criteria and restrictions may vary between lenders and mortgage products. It is important to compare different options and seek professional advice, like from our experts at ams: before deciding on a financing method.

Yes, a home improvement mortgage can be used to add square footage to a property. Many lenders offer home extension mortgages that are specifically designed for this purpose. These mortgages allow homeowners to borrow money for a range of home improvements, including adding extensions, conservatories, orangeries, garden buildings, or converting loft spaces.

However, it is important to check with the lender and ensure that the planned renovations are eligible for financing under the specific mortgage product. Here at ams: we can liaise with lenders on your behalf to secure the perfect mortgage product to meet your requirements.

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The equity threshold for a home improvement mortgage varies by lender and mortgage product. Certain lenders may demand a minimum of 20% equity, whereas others may allow borrowing up to a certain proportion of the property's value. Therefore, it is crucial to understand the precise eligibility requirements of a lender before applying for a home improvement mortgage with them.

It is more challenging to get approved for a home improvement mortgage with a low credit score, as lenders view this as an increased risk. However, ams: works with flexible specialist lenders that offer tailored products designed for those with poor credit. Speak to one of our ams: mortgage brokers and receive professional advice to explore your available options. Click here to view our bad credit mortgage services page.

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A home improvement mortgage can be utilised for energy-efficient renovations, including solar panel installation. Numerous lenders offer mortgage products tailored to eco-friendly improvements, such as the Green Homes Grant Scheme (currently closed). Such schemes provide incentives like reduced interest rates or cashback rewards for those who invest in energy-efficient improvements.

Solar panels are a favoured choice among environmentally conscious homeowners as they help decrease energy bills and carbon footprint. It is essential to check that the proposed renovations meet the lender's eligibility criteria and any government schemes and that the total cost of the improvements falls within the approved loan amount.