Get the right loan for your revamp
Congratulations – you’ve decided to renovate. And now, of course, there’s the question of budget. Unless you have a good cash balance tucked away, you’re going to be looking at funding options. ITP Home Loans can advise you on the loan option that’s suited to your needs.
There are a number of loan paths you can take:
Using home equity
Equity refers to the difference between your home’s current value and the remaining balance on your home loan. Releasing equity in your home makes good sense if the value of your house has increased since you bought it, or if you’ve already paid off a substantial part of your home loan. Your equity can be used as security for financing your renovations.
There are two main routes to using your home equity:
- Extending your current home loan. Increasing the amount of your home loan is easy, and you’re not up for refinancing fees. Take a look at our borrowing calculator to get an idea of how much extra you can borrow
- Redrawing on your home loan is also an easy option. If your existing home loan rate is a variable one, and you’ve made extra repayments on your mortgage, you may well be eligible to redraw these funds to finance your renovations.
Your ITP advisor can talk you through the pros and cons of each.
Refinancing your home loan
Considering refinancing? This presents a great opportunity to review your existing home loan to see whether it’s still right for your current circumstances. Take a look at our refinancing calculator to find out how much extra you can borrow. Warning: You may be up for extra costs, including application fees and exit fees from your old mortgage. By the way, if you intend borrowing more than 80% of your home’s worth you’ll have to pay Lender’s Mortgage Insurance . Your ITP broker will help you decide whether refinancing is right for you.
Short term credit
This takes the form of a low interest credit card, and is suitable for small renovations. Great for buying building materials over the phone or online.
Line of credit
A very useful tool for renovators, a line of credit loan lets you draw down funds when they’re needed. You don’t receive the money in one lump sum, and only pay interest on the money you use. You can conveniently access funds through a credit card or savings account via EFTPOS or ATMs.
Your friendly ITP Home Loans consultant is the most suitable person to advise you on your options to finance your renovations, so get in touch today. You can email us, or make an appointment to see an advisor face to face. Alternatively, give our helpful ITP Home Loans consultants a call today on 1300 387 487.