Renovation Loans are on the Rise

Mortgage

Australia’s Eastern seaboard has seen consistent price rises and market uplift for several years now.  Australia has a long history of DIY renovations and extensions led by a shift in living standards, advancements in building technologies towards greener more efficient homes and the constant pressure to ‘keep up with the Jones’s’.  Matching this increasing desire to get our hands dirty is the lowering of the entry point for tools and equipment due mainly to the large chain hardware entities using the DIY movement as a marketing tool.

The Master Builders Assoc. reported that in 2017 ‘renovation building work reached a decade high with activity topping $8.3 billion.’ And is forecast to be $44 billion over the next 5 years.

Renovations can take many forms from simply painting the spare room, to putting on a deck, all the way up to large extensions providing additional living spaces, bedrooms and bathrooms.  Funding a re-paint may not require a loan but larger works will.

With interest rates at record lows and industry experts suggesting no rises in 2018, a renovation loan is an attractive way to extend the usability of your family home.

So how do they work.  Quite simple really.  The lender will arrange a valuation of your current home, an estimate of the renovation costs will be required on a formal quote and then an estimate of the value of the completed product is determined by the lender.  You are encouraged to provide supporting docs, using recent sales of renovated homes in your area.

Assuming you have equity in your home and that adding value increases that equity on a percentage basis and that you have an income that can service the increased mortgage, you shouldn’t have any trouble securing a renovation loan.  With interest rates at approx. 4% a renovation loan is certainly cheaper than putting the costs on a credit card.

To speak with a broker at Launch Money about a renovation loan for your home or investment property call our team on 1300 925 081.  Alternatively, you can email your questions to:  info@launchmoney.com.au

Apr, 12, 2018

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