Borrowing For Home Renovations
With summer just about here, some of us may be turning our thoughts towards Home Improvements and doing those small projects around the
home that we’ve been thinking about over winter.
The kids might be pestering you for a pool in the backyard, or you think your kitchen is long overdue for a complete make-over before the Family Christmas Party or better still, have you always wanted that deluxe outdoor kitchen complete with back-lit glass door bar fridges? And how are the bathrooms looking after a cold, damp winter?
If you feel that your home could do with a spruce up or indeed, benefit from major improvements and additions to modernise and add value to your home, the next step is to work out how are you going to pay for it. There are three main finance options when borrowing to renovate;
Your current home loan might be the first place to look for funds – do you have a withdrawal facility and enough equity in your current home loan? If so, you may be able to withdraw some of that equity to pay the tradespeople and associated costs as they occur for the renovations. Topping up your existing home loan may also be an option, subject to a valuation of the property and loan to value ratio. Your current lender may “give” you an additional sum onto the existing mortgage for the purpose of renovations. However, this extra amount must be paid back in the same way your mortgage is paid.
Re-financing your home loan to a new loan product or even a new lender is a way of sourcing the funds for renovations. Brett, at Loan Market Ellenbrook, is able to “shop around” for you and source a loan product that is perfect for your needs. The new loan package will include the extra
funds allocated for renovations and re-payments are made as one regular payment. Not only will Brett save you the time and stress of doing this yourself, he will be able to fit the new loan to your renovation requirements, making it a hassle free and smooth transition.
Finally, a Personal Loan may be a sufficient way to fund renovations where the costs are set. If you don’t mind an extra loan re-payment to make on top of your existing loans (rather than one single payment when re-drawing or re-financing loans), then the Personal Loan may be the way to go. A
personal loan is paid off sooner than the portion of the mortgage and borrowers often like to feel they have paid off the renovations long before the home loan is paid off, even if the personal loan is sitting at a higher interest rate than the home loan.
There are positive and negatives to any type of lending. Brett, your local Loan Market mortgage broker will be able to guide you through the borrowing process, talk to banks and lenders on your behalf and provide a suitable finance package for you so you can commence your renovations with one less thing to worry about.
So to get your renovations underway before the summer, contact Brett on 0407 249 567 and let him take the hassle out of your financing and