Improving v moving - what should homeowners do?

In these challenging times, many homeowners have been left with the dilemma of whether to stay in their current place and invest in improving it or move up the property ladder. There is a case for doing either of these, but regardless of which you do it is important to keep a firm grip on your finances. In both situations, using a mortgage calculator can prove an effective way to manage your money.

Through using such a tool - which you will be able to find online - you can not only establish how much interest is being charged on your current mortgage deal, but also see the amount you can save in making overpayments. So, whether you're thinking about buying a new place or looking to stay put, a mortgage calculator can help you to make the most of your cash.

The difficult fiscal climate of recent years has led to a rise in the number of people opting to stay in their current home where perhaps they would have once moved.

While property prices have generally fallen, banks and other lenders have tightened their lending criteria, with a high proportion of Britons suffering from pay freezes. For many, this has made the process of buying a new house simply too much to bear, making staying in their current place an attractive option.

As a partial consequence of this, there has been an increasing willingness to invest time and money into making a home more comfortable to live in. With a significant number of homeowners consigning themselves to staying in their current place for the foreseeable future, there has been a surge in interest in home improvements.

Whether this comes in the form of building an extension, fitting double-glazed windows or adding a new kitchen, such work can not only mean your home is more comfortable to live in, but also has a greater aesthetic appeal.

It is worth bearing in mind that carrying out renovations can increase the overall value of your home - something that can stand you in good stead should you decide you want to sell up and move later down the line.

Instead of going through the hassle of moving to the home of your dreams, improving your current property to create the space you have always wanted can prove to be a simpler and much cheaper option.

Of course, it will still cost you money to renovate your property and, depending on the work you want to do, it may cost several thousand pounds. If you plan on carrying out substantial changes - such as converting loft space into an extra bedroom or adding a two-storey extension - you may want to fund this by remortgaging your home.

However, particularly big projects may require you to first obtain planning permission from your local council and in some cases this can be difficult to approve - if you live in a Grade II listed home for example.

Similarly, your plans could be constrained by where you live. As obvious as it sounds, you can't build an extension on to the side of your home if it is in the middle of a terrace, so there are times when moving could be the only option for getting a home that matches your needs perfectly.

One advantage to moving at this present time is that you'll be in a position of significant strength to negotiate on a buying price. With many would-be buyers struggling to raise a deposit, the fact you already have a mortgage and can use the cash generated from selling your current place should mean you're able to make competitive offers more quickly.

Of course, that isn't to say moving home will not cost you a penny, but you won't have to be worried about one of the biggest stumbling blocks that are holding many people back from buying for the first time.

Whether you're thinking about buying a new house or want to make improvements to your existing place, it is important to consider how you will fund such a move.

Spend some time comparing your options and seeking the most competitive financial products on the market - whether it is a low-rate mortgage or a credit card - and you can be confident of making the right decision for you.

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2012-01-26 18:20:11 © Moneyextra.com