How to finance and prepare for your renovation

Put your hand up if you’ve ever thought about renovating your house? Now put it down again if you decided not to because of the cost. I’d bet most of you have put your hands down. 

That’s a totally understandable response, especially when the cost of living seems to get higher each week. But if that renovation is something you really want to do, there is a way - and better yet, it makes your existing debt work for you. 

I’m talking about using the equity in your house and topping up your home loan. There are two initial steps you’ll need to take in order to see if this is the right approach for you. 

The first is to consult your lender. They will be able to tell you how much equity you have in your property and in turn, how much you can borrow against. They will also be able to explain the terms, interest rates and repayment options available for a loan top up. 

The second is to get a detailed quote. A comprehensive quote means you’re more likely to be able to avoid any surprises down the road, and can also be shared with your lender to provide further detail on the work you plan to undertake. 

Additionally, it’s worth considering the following: 

• Renovation customisation: it’s important to remember that renovating isn’t a one-size-fits-all experience. Your renovation should reflect your unique style and needs, so you should expect to work closely with your chosen building team to create a plan tailored specifically to your home and lifestyle.

• Available budget: don’t forget to set aside a contingency fund for any unexpected expenses. Whether this comes out of your loan top up or from another pot of money, it’s important to have because sometimes renovations can uncover hidden issues that need to be addressed and you don’t want to be caught short. 

• Planning and permits: depending on the scale of your renovation, you might need various permits. Make sure to factor in the time and cost of obtaining these as part of your preparation - unfortunately it can often take longer than expected.

• Quality level: while it might mean a larger up front cost, it’s worth investing in quality materials and craftsmanship. Like the old adage, ‘whatever is worth doing at all, is worth doing well’. Cutting corners can lead to higher costs down the line if things need to be repaired or replaced sooner than expected.

• The building team: for peace of mind always choose a registered master builder. This ensures that your renovation will be carried out to the highest standards and you have the safety net of a professional organisation that stands behind its members' work. 

Considering the above will set you up nicely for a positive experience with your renovation and hopefully means it isn’t as far away as you originally thought.