How To Finance Your Renovation
When it comes to renovations, one undeniable fact is that they come with a price tag. Whether your project is major or minor, it represents an investment. The methods for financing your renovation can vary depending on the scope of the project and your individual financial situation. In this article, we explore five financing options that could be of assistance as you embark on your renovation journey.
“Preparation is key. Unfortunately, there is nothing quick about applying for a loan, so the more prepared you are the better and the quicker you can get the renovations started.” – Mortgage Broker, Nikki Berzin, from Cherry Lending & Finance.
Use your savings
One of the smartest ways to finance your renovation is by using your savings, which means you won’t need to take out a loan. If you can afford to wait a bit, consider creating a budget plan to estimate your costs and start saving before you begin your project. You’ll be pleasantly surprised at how quickly your savings can grow when you set your mind to it. This approach not only saves you from interest payments but also provides you with financial peace of mind during the renovation.
Consider your redraw facility
If your home loan offers a redraw facility, you could potentially use any additional payments you’ve made to fund your renovation. It’s a good idea to consult with your mortgage broker or your bank to determine if this option is accessible to you.
Use your equity
Chat with your mortgage broker or bank about how much you can borrow and how much usable equity you might have. In the context of a home loan, equity signifies the gap between your property’s value and the outstanding loan balance. This equity could potentially serve as a valuable resource to assist in financing your home renovation.
Take out a personal loan
“If you don’t want to utilise the equity in your home for the renovations, you may also have the option of a personal loan,” says Nikki Berzin from Cherry Lending & Finance. A personal loan might be a good idea if you have a minor renovation, but because the interest rate might be higher for a personal loan over a home loan option, it’s best to speak to your broker or bank about this first.
Take out a construction loan
Opting for a personal loan can be a sound choice for smaller-scale renovations, but when tackling a substantial project, it’s worth exploring a construction loan. With a construction loan, your funds are disbursed in a series of progress payments corresponding to different construction phases. This approach allows you to pay interest only on the funds utilized during each stage, thus preventing the accrual of interest on the entire amount from the project’s outset.
Renovations cost money, some of which you might not have upfront. Saving money first before starting is always the best idea, but if you need your renovations done sooner, then speak to your broker or bank about your options.
Chat Renovation Inspiration With The Professionals
While your options for renovating are almost limitless, deciding on the right style is not an easy feat. With each space, comes a different preference or priority: are you chasing style, functionality, trends, or simply want the most bang for your buck?
In operation for over 26 years, at Tile Wizards we pride ourselves on getting you more, for less. We pioneered the warehouse format, and our stores are purposefully designed to make your selection easier, and ultimately offer our customers quality, price, and the right advice.
If you are after some honest and friendly advice, ideas, or inspiration – please don’t hesitate to get in touch with us at Tile Wizards today. We pride ourselves on being able to work with you to bring your dream flooring solution to life.
