How to Finance Your Renovation
If you’re looking to add value to your property or just need to make some repairs, no matter the size, you need a plan and may need to borrow money to get the job done. Getting funding for your renovation up front will help with your planning and it may also prevent you from running out of money mid-renovation. Here are a few finance options to consider.
1. Use the equity in your home
Depending on your financial situation, you may be able to use some of the equity in your property.
Equity is the difference between the current market value of your property and how much you owe, if any, on your home loan. The more repayments you make, and if the value of your property grows, the more your equity increases.
- Home loan top-up. You could be in a position to borrow additional funds on your existing loan.
- Home loan redraw facilities. Have you been making additional repayments on your home loan? Most variable home loans offer a redraw facility, so you may be able to redraw the funds you need for you renovation.
2. Construction loan
For those larger home projects, like structural changes, a construction loan could be the better option for you.
Unlike a standard loan, a construction loan is different as it lets you have a ‘progressive draw-down’, this lets you draw the funds when you have to pay for the construction progress payments. This saves you money as you’re only paying interest on the funds used so far.
3. Refinance your existing home loan
Refinancing is another option to get extra funds to fuel your renovation. This may involve moving to another lender or changing your loan type, e.g. moving from a fixed to variable home loan.
If you think you could be paying less, take a home loan health check.
There isn’t a ‘one size fits all’ when it comes to getting finance, so to learn more about the options available to you, contact us online or give us a call today on 1300 302 474.