Due to the soaring costs of purchasing a new home in Australia many homeowners are choosing to renovate instead. After all, if you decide to sell your home, you have agent’s fees eating into your profits and buying a new one means more stamp duty, moving costs and the hassle of shifting to a new home. The associated expenses of selling and buying means you may lose any of the benefits you gained from moving in the first place. This is where home improvements can be a better option.
Financing the renovation - Construction and renovation loans generally operate as an interest-only facility with a variable interest rate during the building period, before reverting to the final home loan you have negotiated with your lender. During the building or construction period, you only pay interest on the part of the home loan that has been drawn down, or paid out.
Renovation loans pay out funds for the construction or structural renovations of your property in stages called progress payments, rather than as a lump sum like a more traditional residential home loan.
Progress payments are typically made at the completion of five different stages of construction:
Working through your options and understanding the complexities behind home improvement loans with a professional mortgage broker who is already trained to know exactly how to structure your proposal is to your advantage. If you’re considering renovating or home improvements please call Suzy from Best Fit Finance on 0411 528 440 to arrange an appointment at a time and place suitable to you.