Is it hard to get approved for a renovation loan?

All lenders, regardless of the loan you apply for, will consider your credit history. If you have a good credit history, you should be able to get a loan without difficulty, granted you can afford it. Most lenders will ask for details about your income, employment, current liabilities, ongoing debts and defaults. They are also unwilling to lend if you have been or are currently bankrupt. It may also be difficult to get a renovation loan if you’re currently facing financial hardship.

How can I add value to my property while keeping costs down?

Keeping costs down can maximise your potential value increase. You can do this if you: Add value with creative fixes. Homebuyers pay special attention to a home's bathroom and kitchen. You could make a run-down bathroom or kitchen more functional and pleasant, while keeping costs down. With cosmetic renovations, it may be best to limit the changes to what is in plain view. Keep a tab on expenses. Plan and budget ahead of time, and stick to it. When budgeting, you should take into account the cost of materials as well as labour. Make sure your budget accounts for all the renovations you need to make. Consider DIY. DIY can help you keep costs in check. This is because you will not be paying for additional labour, which can be expensive in Australia. However, you need to have access to the right tools and skills. A bad DIY job will do more harm than good to the value of your property, so if you're not confident, don't risk it. Compare your alternatives. Take the time to shop around and negotiate. You could potentially save money on supplies and labour. It's also important to apply the same principle to home improvement loans. The comparison table and tips in this guide can help you find the best deal for you. Think long-term. This is especially important if you plan to continue living in your home. This is because you stand to personally benefit from it. Energy-efficient additions can be a plus (for your bills and the environment). By opting to go green, you may also qualify for certain rebates.

Can I use the equity in my home to renovate?

Yes, if you own your home it is often possible to use your equity for renovations. One option is to apply for a top-up of your existing home loan , which increases its size and you withdraw the additional funds to renovate. Another viable option is using your equity to take out a second loan. This is often the more favourable option if your current home loan is on a fixed rate.

What is the best loan for home renovations?

There is no one best loan for everyone. This will entirely depend on your credit profile, personal circumstances and what you can afford to repay. A good first step is to check out a personal loan calculator and see what fits into your budget.

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