Getting your home and your finances in order for 2021
This article is written by Kingsbridge partner Brookson Financial.
Get your home ready for 2021
With the unfortunate outbreak of COVID-19, many people are now working from home. It’s becoming more apparent that many prefer this way of working and are keen to stick with it once the pandemic is over. Many are enjoying a better work / life balance and feel they are being more proactive, as well as saving time and money on the daily commute.
However, setting yourself up with a comfortable workspace in an already full home can be a challenge, as few of us have extra space for an office. This has led some homeowners into opting for a home conversion, which could be anything from moving a wall to building an extension. Given that we didn’t know a pandemic was around the corner, most of us won’t have savings set aside for this.
So what can you do to raise funds?
Raising finance against your home could be the answer. This could allow us the extra cash to carry out home improvements in order to adjust to the new normal working life. The overall amount you could borrow and the interest rate will depend on various aspects of lender criteria including your income and property value.
Once you are happy with your mortgage options, if you intend to carry out structural work that requires planning permission, or it falls under permitted development but requires building regulations, then the lender may ask you for a schedule of works and ask who will be completing the works. Using the right mortgage lender and presenting the application in the right way is essential in ensuring you get approval for your re-mortgage to fund a property development.
If you are tied in with your existing lender, a further advance could be cost effective as most lenders will offer further advances at rates similar to their main mortgages.
Your lender may need to send out a surveyor to value your property or they may use a ‘drive-by’ valuation. Some lenders also use their own internal house price index valuation. One thing to bear in mind is the lenders maximum loan to value criteria. If your loan to value is high, the amount you are able to borrow is likely to be less, and vice versa.
Get your finances ready for 2021
Speaking more generally, the beginning of a new year is a great opportunity to get your finances in order. A good starting point is to ask yourself the following questions:
– Can I use a salary sacrifice pension to reduce income tax and national insurance contributions?
– Have I maximised my pension contributions as the end of the tax year looms upon us?
– Is my mortgage rate the best one available for me?
– Can I boost my tax efficient ISA savings by tax year end?
– Have I had a complete overall Financial Health Check of my personal financial situation?
If the answer to any of these is ‘no’, then you could benefit from a review with a specialist in financial advice for contractors. Brookson Financial are remaining open over Christmas to help get you financially fit for the new year.
Brookson Financial have an experienced team of advisers that can advise you on all of the above and help get your finances shipshape for 2021. Book a no-obligation phone consultation today here.
Your home may be repossessed if you do not keep up repayments on your mortgage.
The value of investments and income from them may go down. You may not get back the amount originally invested.
Brookson Financial are authorised and regulated by the Financial Conduct Authority.