Renovate Your Property’s Value
Since purchasing your dream home a number of years or even decades ago, you have begun to notice changes that need to be made to outdated or unfashionable features such as the colour scheme, wallpaper, fittings and storage areas. Perhaps you want to make some significant structural changes to better suit your home to your current lifestyle, such as installing a long-awaited walk-in wardrobe, decking or an extra room.
If completed correctly, renovations can optimise the potential of your home or investment property.
Rest assured there are a variety of loans available that can enable home owners to renovate their existing property.
If, for example, you are simply planning to freshen up your property with a new coat of paint, fitting of fixtures, you may wish to consider a personal loan. Usually the repayment period is between five to seven years. This type of loan often includes no fees and there is no security required, meaning your home and assets are not at risk.
Keep in mind that the interest rate on a personal loan is often higher than the interest rate on the average mortgage. So, perhaps consider a ‘top up’ of your mortgage (if you have one) instead but remember the extra money loaned will be stretched out over the entirety of your mortgage term. In this case it’s best to make extra payments on your mortgage as if you were paying off the personal loan as a separate debt alongside your usual mortgage repayments.
If your renovations are more complex and involve structural changes such as adding a new bedroom or bedroom, and Council approval is required, a construction loan may be needed.
A construction loan finances the construction of part or all of a dwelling, and the funds are drawn down over time as the structure is built, rather than in one lump sum. These draw downs are sometimes referred to as ‘progress payments’, and the lender usually sets a time limit on the draw down period.
Alternatively, you may want to take out a second loan for the renovations. Your lender will make progress payments and once the loan is fully drawn down, you then have an option to consolidate your loans into one product.
Whether you are planning to get your hands dirty or hire someone to do it for you and are unsure as to how you can afford it, then consider using your mortgage facility. A reputable mortgage broker such as this mortgage broker melbourne can discuss the nuts and bolts of your current loan and the options available to you to help you complete your renovation.
Borrowing a little extra now to complete some cost-effective renovations is a great way to add value to your property in the long run.