For years people were able to buy a new home, live in it until they outgrew it and then cash it in, doubling their money and using the equity to buy a larger home. An entire generation were able to quickly move up the housing ladder, taking advantage of the huge increases in house prices along the way. Then in 2008 the market stalled and then dropped, leaving millions stuck where they were.
Those who had healthy equity because they didn’t continue to remove the equity through remortgaging in the boom years were still able to live comfortably, but those people who had borrowed to the max and overstretched themselves were looking negative equity in the eyes, and were simply unable to move again.
Initially for many families this wasn’t a problem as low interest rates kept their mortgage payments down, and they were living in the home they had chosen, but as kids grow up, space becomes a bit more of an issue, and many families who could do with a bigger home are stuck cramped in a home they can’t afford to leave.
A couple of boy aged 4 and 6 can easily share a bedroom, but when they reach the ages of 14 and 16 that becomes a whole different problem. Space downstairs becomes more cramped as children get older as well. Instead of going to bed at 7.30, leaving the adults with space to themselves every evening they stay up later and later, eventually going to bed after their parents when they reach their teenage years.
The amount of space a family has in a home when there are teenagers around can make a huge difference to the harmony of the house, and teenagers often need their own space to do their own thing.
Many people have now paid their way out of negative equity, in thanks to a slight increase in house prices since the 2008 crash, and can borrow money against their home to extend it. They still don’t have enough money to move home though, with the huge deposits required by lenders these days.
A loft conversion, adding a conservatory or building an extra room on the side of the house can make all the difference to the amount of space in your home when everyone is on during the weekends and evenings. An extra room and television will halve the arguments over what to watch, and many find that allocating a kids lounge and an adult’s lounge gives the adults some of their freedom back.
You can also separate the mess, with the children’s mess allocated to their own area, which you can then shut the door on, and you don’t have to tidy up the lounge every night before you can sit down and relax to watch TV. Many families find the extra space gives them room for a dining room table if they didn’t have one before, which can be eaten at and used as a space to do homework.
One of the biggest advantages of extending your home is the value it adds to the home in the process. Whilst you may spend £10,000 adding an extra room in the loft, many customers find they add at least that much value to their homes, with some experience bigger gains.
Whilst your monthly payments out will increase with the addition of the loan, you’ve also increased the amount of equity you own in your home, and the amount of space you have to live in. You’d likely find that moving to a bigger home would cost more anyway, so in many ways you’re better off financially just extending your home.
Secured loans can be used for any major purchase, and it’s not just extending your home that you can borrow the money for. If you are planning on buying an expensive car, and want to spread the cost you’ll often find that secured loans offer lower interest rates than personal loans, and for customers who are confident they’ll have no problem repaying the loan, the fact that the loan is against their home will not worry them.
You can also borrow money to pay for a wedding, to go on a big family holiday or to completely redo your kitchen and bathroom, the latter two both adding value to your home in the process.