What is a Renovation Home Loan?
Every home reaches a point when it’s time for an upgrade. Over a 30 year period, paint fades, appliances stop working, and a home’s structure requires replacement. A renovation is far more affordable than purchasing a new home, especially if you have fallen in love with your house.
A renovation home loan finances this project. How much you need depends on how much space you plan to renovate. A home renovation in Australia ranges from $40,000 to $300,000. If you plan to renovate a portion, you can expect to spend between $15 a square foot to $60. On an hourly basis, you can expect to pay between $50 to $65 an hour.
The amount a lender is willing to finance for a renovation depends on your plans. If you’re going to use a licensed builder, a lender finances up to 90% of the renovation total costs. If you’re planning a whole-house renovation, lenders finance between 90% and 95% of the total costs.
When you apply for a renovation home loan, be prepared to provide several pieces of information to the lender. In some cases, the lender pays the builder directly. Other times, you’ll receive the funds in increments. It’s also good to know the current home loan rates.
Renovation Home Loan Conclusion
The purpose of the renovation home loan is to help homeowners finance a teardown and rebuild. It has similarities to the construction loan but is still a different financial product. Homeowners interested in financing their home’s upgrade can contact Mortgage Street. Our loan specialists are ready to go over financing options with you.