Renovations are both exhausting and disruptive but they are something exciting to get done for your home. Not only can they increase the value of your home quite drastically, they can make your home look and feel fantastic. It doesn’t matter why you’re renovating in the first place, some people choose to do it to sell their home and others choose to do it for more comfort, but taking the plunge is the biggest opportunity that you have to make your house look fantastic.
Whether you are funding it yourself, or you are looking at an equity release calculator to figure out if your house can fund it for you, you need to know your financial options. Renovations are supposed to enhance your home rather than give you stress and break the bank, so have a look at our suggestions below to make sure that your renovation can go off without a hitch.
- Look into a home equity loan. We’ve already talked about an equity release calculator but it’s the most common way that people borrow money when they want to renovate something. Whether it’s the kitchen, the bathroom or the lounge, you could have involved yourself in borrowing against the current value of your house. It does depend on the home loan amount you currently have and whether your property has increased in value over the last few years as to whether or not you would be granted this equity release loan, however it’s always worth looking into.
- Ask your mortgage advisor about refinancing. Similar to the above, refinancing means paying off your existing loan and starting an entirely new line. If you are planning a complete transformation of your home, it could be a great option as you can spread the cost over the life of the loan. Home loan interest rates are often lower than personal loans or credit cards because you have more to lose, so only settle yourself with another loan if you can afford it and afford not to lose your house.
- Consider a redraw option. If you have been in your property for a few years and you’ve been chipping away at your mortgage and paying more than the minimums, you might be able to access your own money. There are plenty of home loan rates out there that have a redraw facility and these facilities allow you to have more money available. Don’t forget that some lenders have rules around the times you can withdraw on your loan, and it can increase your regular monthly loan payments. Redrawing is not something you should just jump into.
- Look at a personal loan. Some renovations can be covered with a smaller personal loan, so if your renovation isn’t that high, borrowing up to $30,000 could actually make your renovation possible. In fact, you could renovate a couple of rooms for less than that.
No matter what you do, renovations shouldn’t break you and you should still be able to manage your current costs.