What's The Best Way To Finance Home Improvement?
With the interest rate the lowest it has been for many years, homeowners are looking at the best way to finance home improvement projects and home renovations.
01/02/2021
2020 was a bad year for everyone, and not just in South Africa. This year, homeowners are looking at ways to tackle home improvements and renovation projects that will not only improvement their way of living but also the value of their home. With interest rates being the lowest for many years, there has never been a better time to get approval on a loan to enjoy your lifestyle to the fullest.
While do-it-yourself is a hot topic and has been growing in popularity over the years, there are still some home improvement jobs and renovation projects where you aren't willing to sacrifice on quality. For these, you are probably going to need funding to get the job done - but what is the best funding for a medium to large scale project?
Finding the funds is one of the biggest problems when you are considering home improvements and renovating a home and the first step in the process is finding out how much it will cost. You need to know what type of expense you are looking at before you can even consider moving forward and how much the monthly repayment will affect your day-to-day finances.
COST OF IMPROVEMENTS OR RENOVATIONS
The simplest way to find out how much the project is going to cost is to obtain quotations and estimates on the work that needs to be done. During this process, you will also pick up helpful information as to what can and cannot be done and what would be involved. This will be the time when you can sit down and set a budget.
It is important to set a budget in place, not to avoid overspending, but to know what is going to be happening and, hopefully, be in a position to plan for any eventuality, which is important when planning any home improvement project where you need to prepare to expect the unexpected.
HOW TO FINANCE YOUR HOME IMPROVEMENT PROJECT
While there are many finance options you can choose from, you will want to consider one that fits in with your monthly budget. Interest rates are low at this moment in time, but it is always best to keep in mind that this might not always be the case and you don't want to be in a position that you can no longer afford the monthly payments on a home improvement loan.
If you are planning on doing a large scale renovation to expand your home, the best approach and the less risky alternative is to look at extending your existing home loan. Most banks offer home loans where you can apply for additional funds to finance home improvements or renovations. Additionally, you may already have a home loan that allows you access to any available equity in your existing arrangements to pay for expensive renovations.
Before you jump in and apply for a personal loan from one of the many finance organisations on the market, talk to your bank about the possibility of a re-advance on your existing bond or taking out a second bond on your property and take a budgeting class. These options are the most cost-effective ways to obtain the funds necessary and keep repayments at a minimum.
For those who don't have any available equity in their home loan but are considering taking out an additional loan there are several organisations that offer home loans at reasonable interest rates and offering you the convenience of financing any renovations or home improvement projects you have in mind. Talk to Builders about their affordable flexible finance solution and tie-in your financing.
