Adding value to your home by renovating
Renovating for profit often pays off in the long-run, but finding that money in the first place can be tricky. Fortunately, there are various options to apply for funds.
The first thing is to work out how much money is needed. Be realistic about what can be achieved, and what changes will actually add value to your home.
Once an established plan has been worked out, the research on which lending option is most suitable can begin. Depending on the value of the renovation, you can consider a personal loan, a construction loan, or refinancing your current mortgage to access any equity.
Construction loans are a popular way to finance renovations. This type of loan differs to a personal loan in that you don’t receive the full amount upfront, but instead receive payments as the construction process progresses. This is called a drawdown, and can be a relief should things not go to plan. Another benefit of a construction loan is that interest is charged on the amount drawn, rather than the total. In general, the interest charged on a construction loan is also much less than that of a personal loan.
Refinancing your current home loan can also be considered, as equity in the home is based on how much the property is worth now, compared to the remaining value of the loan. Additionally, refinancing may be worth exploring to see if you can get a more suitable deal on your home loan and save more money in the future.
With various options to choose from, remodelling dreams can be realised. Any questions, please give us an obligation free call.