When it comes to home improvement, extensions are a popular choice amongst homeowners looking for ways to add value to their property and boost living space. However, the size and scope of a house extension project can be costly, and it’s important to consider financing options carefully to avoid overstretching yourself financially.
Can I build a 2 story extension?
One of the most common financing options for a house extension is to take out a homeowner loan. These loans are available from banks, NBFCs, and HFCs and can be tailored to suit individual repayment capacities. Lenders typically require that a loan applicant’s total monthly EMI contribution (including the proposed EMI for a Home extension finance) should be within 50-60% of their net monthly income.
Alternatively, you could also borrow money from family and friends, or use your savings to pay for the extension works. However, it’s worth bearing in mind that if you use your savings to finance a house extension, you’ll lose the protections that come with Section 75 of the Consumer Credit Act.
Another way to raise funds for a home extension is by remortgaging your property. However, it’s worth remembering that this can be a complicated process and you may need to sign up to a new mortgage rate that has Early Repayment Charges attached. Alternatively, you could take out a personal unsecured loan, though these tend to have higher interest rates than secured loans. However, if you do decide to go down this route, it’s worth shopping around for the best deal.