Has the time come that your home needs some renovations or upgrades? Perhaps your family has expanded, and you need more space, or it's time for that kitchen or bathroom to get a facelift.
With ever-rising building costs, some home projects and renovations have been put on the back burner but there are options available, like refinancing or getting a home loan top-up. Get the best advice from your mortgage broker in Auckland to find out the best option for you.
When Can You Apply For A Mortgage Top-Up?
The following projects are examples of where using a mortgage top-up can be helpful:
- Kitchen and bathroom renovations
- Landscaping
- Installing a heating system, insulation, or double glazing
- Extensions to your existing structure, for example, an extra bedroom
Your starting point would be to get two or three estimates from reputable companies, firstly to get an idea of the price range you would be looking at and also to compare the different options they present to you.
Your best mortgage broker in Auckland will advise you to add twenty percent onto the original quote, as frequently unforeseen eventualities arise when embarking on renovation work.
Do You Qualify For A Mortgage Top-Up?
Your best mortgage broker in Auckland will be able to help you work out how much additional financing you could qualify for and also how to adjust your budget to ensure that you can afford the extra repayments.
Banks will look at two important factors when assessing your application for a top-up amount:
- The amount of equity you have in your home
- Your ability to service the additional repayments
Your available equity is calculated as the difference between 80% of your homes value (for owner occupied home) and the amount you still owe on your home loan.
For example:
Home value: $600,000
Mortgage: $420,000
$600,000/80% = $480,000 minus $420,000 current mortgage
Available equity: $60,000
Once your available equity has been calculated, an assessment is done to determine your ability to service the extra repayments and whether a top-up with your existing bank or refinancing to a different lender is the best option for you.
Get in touch with Simpler today for the best mortgage broker advice in Auckland. If you need an adviser that offers a fast, friendly and simple process, you have come to the right place.
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