Are Home Renovations a Good Idea?
There comes a time in the lives of most families when they have to battle with one of the big real estate issues – renovation. Working out whether or not to renovate can be a tough question. You probably love the house you live in, and its location, but are struggling with its space, or lack thereof. Perhaps you are planning to have children and are thinking of adding on another room. Maybe you are realising that having two siblings of similar age sleeping in the same room was a great idea at the time, but not now they are teenagers. Sometimes going through a renovation can be difficult, and sometimes it can be the greatest property decision you have ever made. It can add value to your home, and help get you through a period when upgrading to a larger house is not affordable. With stamp duty and the costs of moving and finding a new home, renovation could be the best financial option for you at the moment. At Mortgage House, we have access to a range of mortgages that can help make your decision easier, and create a home that you and your family deserve.
Can I use my existing home loan to renovate?
Your existing home loan can be a great asset when it comes to renovating, but that can be dependent on which lender you are with. Firstly, if you have been paying off your mortgages over the years without too much hassle, you have probably built up a record as a great customer, and most lenders love to see that. Customers who make payments on their mortgages either on time or before time, for long periods of time, are always noticed. Secondly, if you have been paying your current loan off on schedule and are now starting to think about a renovation, you may have built up a handy amount of equity in your home. Equity is basically the difference between the amount left on your loan, and the market value of your property now. So, if you home is worth $500,000 and you have $200,000 to pay off your loan, then you have $300,000 equity in your existing home loan. Most lenders will consider letting you borrow about 80% of the equity. That should give you an idea of the amount of equity that may be available to you. There are a number of options around how to use that equity, and one of them can be in your renovation. There can also be other options around using your existing home loan and other mortgages to help with your renovations. We know the home owner’s journey inside out, so give us a call and we can run you through all the options available to you and your family.
What renovation loans are available?
There are plenty of mortgages available to home owners casting their minds towards renovation. The first port of call is looking at variable mortgages. A variable interest rate allows you to add flexibility to your loan, and we can find a great rate for your individual situation. Fixed rate mortgages can also be a useful option. As the name suggests, fixed rate home loans give you the stability of predictable repayments for between one and five years. Construction loans can also be a great option when it comes to thinking about renovation. Construction loans can allow you to have access to certain amounts of a loan at certain times, when work is finished on certain parts of a renovation. The lender can take into account the final cost of your home in how much you are allowed to borrow. And finally, split home loans are another great option. They mean you can make part of your loan fixed and the rest variable.
In 2017, are home loans harder to get?
Australian lenders showed the rest of the world how stable they were during the Global Financial Crisis, and in 2017 they continue to be world leaders in lending. At Mortgage House, we are proud to say we are part of an Australian team that puts its customers first. We know what it takes to help you finance your renovation in 2017. Your first step should be to determine your budget. One of our Home Loan Specialists can help you identify all that needs to be done to make this happen. We will also build in some rainy day money just in case. We can help you find options from all the regular kinds of mortgages, as well as loans if you don’t have much of a deposit, or if you have a large deposit. We can also help you with low-doc loans if need be. And we can also help you navigate the pre-approval process, to give you the best chance possible.
Can my property loan help me?
One of the big attractions to those who are planning a renovation is refinancing their current loan. The loan you currently have may no longer suit your needs, and at Mortgage House we have a large range of modern mortgages that may give you a better deal. Alternatively, refinancing can put all your loans in one spot. If you have a car loan or a personal loan that dates back a few years, why not add it all to a mortgage and let us chase a rate that may bring your overall repayments down.