22 Nov Home Renovation: Questions to Ask Yourself Before You Start
Home renovations are fairly common and a great way to update your home and increase property value. In most cases, renovations are big projects and it pays to be well prepared. If you’re about to embark on a major renovation, ask yourself the following 3 questions to ensure a successful outcome.
Are you renovating for profit or comfort?
Before you decide how deep to go with your renovation project, you need to know what your end goal is. If you are renovating to raise the value of your property and will sell it in the near future, it generally makes more sense to update the kitchen or add another bedroom than it does to install a sauna or swimming pool – those items are nice to have, but not everyone is willing to spend a lot of money on them. However, you may make home improvements because you want a home that truly fulfills your individual needs. In this case, if you’ve always wanted a sauna, then add one if you can afford to – even if it doesn’t make as much difference on property value. Understanding your renovation goal and having a specific plan in place will help decide how extensively to renovate and ensure you spend the money in the right places.
How much should you spend on your renovation?
Having a well-planned budget is also one of the keys to a successful renovation and may involve more consideration than you expect. You may have worked out a budget or got an estimate from your contractor. However, before you move ahead, calculate a few more times. Does your budget include furniture, appliances and light fittings? Does this number include accommodations for you if you need to move out for a night or two? Make sure your budget is inclusive of all these expenses, and don’t forget to add in a contingency fund – things may go wrong and cost more than originally projected. It’s also a good idea to talk to your friends who have lived through renovations before and find out how much similar renovations in your area cost to get a better overview of expenses.
How will I pay for this project?
Just like most big projects, renovations can be frustrating and stressful if you don’t have enough money on hand. To give you better control over your renovation, there are several financing options you can choose from.
You may be able to borrow against the value of your home to fund your project if you have built up enough equity in the house. How much you can borrow may be subject to the amount of equity you have in your property and other serviceability criteria. Compared with placing the cost on your credit card, you will generally pay much less on interest and have better control of your financing and budgeting process.
With mortgage interest rates dropping to an extremely low level, refinancing your mortgage could also be a smart way to fund your renovation and secure a lower interest rate. As interest rates are a big component of a home loan, a lower rate means significant savings. However, refinancing is not an easy decision and is only a good idea when you do it the right way- that’s where a Mortgage Adviser can help. At Max Mortgages, we can explore a number of competitive refinance options to help you save money and we aim to provide life-long support whenever you need us.
In addition, through our personal loans division Max Loans, we are also able to secure Home Improvement Loans which are a completely separate loan and doesn’t require a refinance or break on your existing mortgage. Often this type of funding is a better fit for our customers.
GET IN TOUCH WITH A MORTGAGE ADVISER
With all these questions in mind, hopefully you will get a better idea of what you need to do before you start your renovation project. If you want some expert advice on financing options, we’re just a call away. We would like to help ensure you have the right information and expert support on your side. Email us or call us on 0800 ASK MAX (0800 275 629) today to arrange a free, no-obligation chat!
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