What should you know about a Renovation Loan?

This article will explain why sometimes it doesn’t pay you to wait to apply for a Renovation Loan.

Please read on to discover why a lot of Australians are getting on with the job of renovating their home sooner, rather than later.

What is a renovation loan?

The purpose of a renovation loan is when a bank agrees to fund alterations and improvements to a home. Also known as remodelling, home improvement, home renovation and refurbishment loans, these loans are designed to assist you in completing the project, in order for you to enjoy the benefits whilst you are paying off the loan.

Depending on the size of the renovation, and the lender that we approach for finance, the lender may choose to call this a construction loan. It is called a construction loan simply because the lender will want to be in charge of the funding, as it is needed. Please see our Info page, Construction Loan for much more detailed information in relation to this type of loan. Please feel free to call a mortgage broker at Illawarra Mortgage Brokers to discuss your options in detail.

Why wait to renovate?

We have met many clients over the past 16 years, who have applied to refinance their homes to a more competitive lender, in order to save money. We have found that these same clients had a desire to pay a little bit off the home loan, with the purpose of redrawing to complete some remodelling or renovation work on the home. They had decided it would be better to wait, save some money, and then redraw the money to pay for these home improvements. Maybe it would be better not to wait.

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Bank vs Mortgage Broker?

Do you really know what a mortgage broker does?

We can’t stress how important it is for us to know everything about your circumstances to best advise what loan structure you should have in place. It is all about discussing your needs, and making sure that we achieve the best result possible for you.

There is no comprehensive online application form for you to fill out on our site as we just do not need you to actually send us your information, until we can establish that we have a solution for your lending needs.

These are your simple steps to apply for a loan.
  • Contact us – either contact us or leave your details and a suitable time, and we will contact you.
  • You will speak with a broker who will take into account your needs by discussing not only your requirements, but also any concerns you have, and offer you some possible strategies and ideas that you may not have thought about. This call usually takes 5 – 10 minutes.
  • Once we know what you require, we will draft calculations and email you a proposal – this will usually consist of a few options that are easy to understand.
  • Once you have had a chance to look at what options are available, you can contact your broker or the broker will call you, to discuss the proposal. You can then decide if you wish to proceed or not or you may just want to discuss more options.

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