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Home Extension Loans

A home extension loan is often one of the most ideal means to appreciate your home value. If you want to add more space to your home and make it more attractive then you should go for a home extension loan.

About home extension loans

Home extension loan is a type of home loan. In some countries, it is also known as home improvement loan. These loans are offered for carrying out maintenance work or extension of the existing house. No matter how big or small the extension is, the extension has to be financed in some way. The smaller the extension, the less will be the problem. When you’re thinking about a home extension, you have a variety of options in your hand. You can use your savings or borrow a loan to carry out home extension. You should make a comprehensive budget to find out how much you should borrow as a home extension loan. If you don’t make a thorough budget, the amount that you borrow might not be sufficient to carry out a home extension.

Most borrowers take out a home extension loan to improve their property and sell it at a profitable rate.

Ways of receiving home extension loans

You can go for a home extension loan in different ways and some of these means are detailed below:

1) Take out a home improvement loan

Home improvement loans are useful means to carry out home extension work. These loans are available at comparatively lower rates than personal loans. On certain occasions, you might be lucky to get one of these loans at a rate which is equal to the prevailing mortgage market rates. You can obtain a home improvement loan from a mortgage lender and it is not essential that you have to take it from your own mortgage lender and get the loan proceeds backed by your home. To qualify for a home improvement loan, it is important that you remain current with your payments.

2) Take out a personal loan

If you don’t find a home improvement loan, then you can opt for a personal loan and use it as a home extension loan. The only disadvantage is that the interest rate is higher than a home improvement loan or other types of mortgage loans. If you don’t have a steady income, then it is recommended that you shouldn’t go for a personal loan to extend your home.

3) Re-mortgaging

This is the most affordable option for a home extension loan. When you’re improving or extending your own home, then the easiest and most popular technique of getting the money is to stretch your current mortgage or remortgage to tap the equity in your home from its increasing value. This indicates that you can borrow the required money and pay it off throughout the duration of the home mortgage loan and the hike on your monthly payments will not be that significant.

How can you extend your home?

You can extend or add space to your home in different ways and some of those are given below:

  1. Attaching open balcony
  2. Attaching a bathroom
  3. Constructing one additional room on the roof

How much can you avail as home extension loans?

The amount that you can avail as a home extension loan is dependent on a number of factors which include the following:

  1. Age of the borrower
  2. Repayment ability of the borrower
  3. Steadiness and permanence of income
  4. Academic qualifications
  5. Income of the co-applicant
  6. Number of dependents
  7. Liabilities of the borrower
  8. Assets of the borrower
  9. Saving habits of the borrower and others

How much you need to pay every month?

The amount that you need to spend on your home extension loan is dependent on the following factors:

  1. Interest rate applicable
  2. Amount of loan
  3. Loan term

Home extension can appreciate your home value many times. However, before going for a home extension loan, it is better that you decide whether you can afford to borrow it. You should consult a structural engineer or architect before going for such a loan.

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