Extending Your Mortgage

Where from? Existing mortgage lender.

How the scheme works Your mortgage lender may be willing to make you a further loan and add the amount to your existing mortgage. You pay off both loans, either as two separate loans or as one loan made up of the two lumped together.

Points to note - You may have to pay for a surveyor to re-value your home. The new lo won't qualify for tax relief. With some lenders, you might find that e tending your existing mortgage means that the whole amount you're borrowing is taken out of the MIRAS scheme - this means that your monthly payments will be higher and you'll have to claim tax relief separately from your tax office (or, if you're a non-taxpayer, you won't be able to get tax relief).

Verdict A good loan source, whatever the purpose of the loan. Some lenders charge a bit less where the loan is to be used for home improvements.

Loans for home improvements (usually extensions to your I existing mortgage or second mortgages) used to qualify for tax relief Since 6 April 1988, they no longer qualify. Existing loans taken out before then continue to get tax relief (though these loans count towards the overall £60,000 limit). If you're getting tax relief on a home improvement loan, be wary of replacing it with another loan - you'll lose the relief

Read more about Selling Styles

Borrowing Against Your Home

Bricks and mortar have traditionally been viewed as a sound investment, particularly over the long term. Even short-term gains can be staggering: for example, over the three years to the end of 1988, house prices in the UK rose by an average of 75 per cent, though increases were considerably lower in Scotland, Northern Ireland and some of the northern areas of England. As a result of rising house prices, many people now have a large pool of untapped capital - 'equity' - over and above the amount of their outstanding mortgage.

You may be happy to leave your capital invested in your home, but... see: Borrowing Against Your Home

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