You are not entirely satisfied with the house: the kitchen, the bathroom or something else on the property is due for replacement or you would like to renovate. These renovation plans can cost you a lot of money. Money that you may not have directly because your savings are not sufficient. There are several ways to finance the renovation.
Second mortgage for a renovation
Is the value of your home higher than the remaining mortgage? Then you have an overvalue. You can then choose to take out a second mortgage , with the surplus value as collateral. The interest on this second mortgage is deductible if you take out a linear or annuities mortgage . In doing so, you take out the mortgage during the term. You have to do this in a maximum of 30 years. It is sensible to look not only at the current mortgage provider for the second mortgage. Compare the costs with the various mortgage lenders and let a mortgage advisor help you with this. Request an introductory mortgage interview here.
Increase current mortgage for a renovation
When you take out your mortgage, the mortgage deed is registered with the notary. This contains the agreements about the mortgage, as well as the maximum mortgage amount. You can choose to have this amount set higher than you borrowed for the purchase of the property. This is called a higher registration. Example: you have agreed a mortgage amount of € 250,000 with the mortgage lender, of which you use € 244,000 for the purchase of the property. The remaining amount of € 6,000 can then be used for the renovation.
The advantage of this is that, if you want to remodel later, you can use the remaining amount of the maximum mortgage that is laid down in the mortgage deed. You do not have to go to the notary again and that saves you a considerable amount for a change at the notary. Costs that do add up are the new closing costs and possible valuation costs. After all, the mortgage lender will want to know whether the value of the home and your income allow the extra loan amount. It may therefore also occur that the mortgage lender rejects the additional amount you want to withdraw, for example if the mortgage lender calculates that your current income is too low for that.
It can also be detrimental to register the mortgage higher. If you want to take out a second mortgage or loan with another lender, then you will see how high your debt is at that moment. The lender starts from the increased amount stated in the mortgage deed.
Mortgage for a renovation of a new home
When buying a house you can also finance a planned renovation to improve the house. To determine how much you can co-finance, we look at the value of the converted home. Of course, this value must be determined by the valuer on the basis of the building plan. The interest on the mortgage is deductible, provided it is a linear or annuity mortgage . The mortgage with the National Mortgage Guarantee can also be taken out and of course the rules for NHG must be met.
If you plan to install energy-saving facilities on or in the home, for example solar panels, you may borrow 106% of the value of the home.
Personal loan for a renovation
You can choose to finance the renovation through a personal loan. The advantage of this is that you do not have any additional costs, such as notary fees. However, the interest on a personal loan is often higher. You have to repay the loan, annuity or linear, in a maximum of 30 years, just like a mortgage loan.