Financing a renovation difficult?? These are the options for people over 55 to increase their mortgage and to take out renovation work.
A renovation enhances your living pleasure. In addition, it can make your house future-proof, by making it more sustainable or being able to live at home for longer. Renovation is also a major investment.
Different ways to finance a renovation
There are various ways in which you can finance a renovation. Savings are high on the list. The savings interest is now very low, so you don’t have to leave it at that. Renovation contributes to the home value and with a bit of luck you lift more on the house price rise. By financing your renovation with savings, you still make a little return.
Borrow for a renovation
If you do not have the savings or do not want to spend it now, you can borrow for a renovation. For people over 55 there are a number of things to take into account.
Financing renovation with a mortgage
You can finance a renovation by increasing your mortgage. The new mortgage amount must then fit within the current mortgage standards. This can be a problem for people over 55. Banks already take your (lower) income after retirement into account 10 years before the state pension age.
To finance your renovation with a mortgage, there are two options.
- Various lenders offer mortgage products with which you can redeem your surplus value at a later age.
- With a mortgage with NHG, broader test standards of 10 years for the state pension age apply.
Partly due to the low mortgage interest, financing a renovation with a mortgage is interesting. However, you must take into account advice and / or closing costs. We recently received the following question from a reader.
“I need $ 10,000 for the renovation of my home. For that advice to the SNS I have lost about $ 2250.00 in costs. How can that be prevented? “
Close a renovation loan
You do not pay any closing costs for a renovation loan. In addition, homeowners can choose a longer term and the interest is, under certain conditions, deductible. A refurbishment loan is tested on your income and you can close it next to the mortgage.
Lenders apply a maximum age until you can take out a renovation loan. This age limit has become considerably wider in recent years. At astro the age at which the loan must be repaid is 74 years, at Credither even 78 years.
If you do not fit within these standards, there is still a possibility to finance a renovation. The Housing Fund (SVn) offers loans, including the ‘permanent loan’ for pensioners.