Steven Clarke asked:




Re-mortgaging poses many financial risks, but it also poses an opportunity to increase your property investment return by increasing the value of your home. Many people re-mortgage their home and use the money that they have earned in property capital to go on holiday, pay off bills or spend lavishly for the short term. All that they are left with at the end is another full term mortgage. They are exactly where they were when they first bought their home.

There is another alternative. If you re-mortgage your property and use the capital earned to make improvements to your home, you can earn back all of the money that you refinanced plus some. The following are some of the smartest upgrades and improvements that you can make using the equity in your home:

o Kitchen – An upgraded kitchen among the best home improvement that you can do. The return for fully refurbished kitchens is nearly 100%. Additionally, buyers look for a great kitchen when they are shopping for a new home. A nice kitchen could mean the difference between your home selling quickly for top price or sitting on the market forever.

o Bathrooms – Master bathrooms sell homes. If your home does not have a master suite, it’s time that you create one. Not only will a master suite help you sell your home more quickly and for a higher price than you would otherwise have been able to, it will make living in your home more enjoyable. You should also make sure that there are plenty of bathrooms in relation to the number of bedrooms in your home. For example: A five bedroom home needs two bathrooms minimum, three is ideal.

o Addition – An addition to your home increases the size of your home which directly impacts its value. Adding a bedroom, family room or any other type of living space dramatically raises your selling price. You can expect to receive all that you invested plus some.

o Outdoor upgrades – Re-mortgaging to pay for landscaping is a smart move because it doesn’t take that much money to improve the outside appearance of your home, yet the return on your investment will be great. Outdoor living spaces such as patios and outside kitchens also attract buyers depending on which neighborhood your home is located.

o Premium upgrades – Premium upgrades such as granite countertops, pools, gyms and home theatres can increase the value of your home as well. Be careful, though. If your home is not situated in a high-priced neighborhood, premium upgrades could be overkill.

Re-mortgaging your home to pay for home improvements is a great way to increase the value and marketability of your home without investing money out of your pocket or savings account. Re-mortgaging allows you to enjoy a nicer home today and a higher selling price tomorrow. What better way to use the capital that you have built up in your home?

Kathryn