If you’re thinking of renovating to sell, a personal loan could offer a useful source of funding.
Quality renovations don’t come cheap, and while well-planned home improvements should increase the value – and buyer appeal, of your home, it still makes sense to consider a variety of funding options.
Personal loans worth a look
Arranging a home loan top-up may be one possible source of funding for renovations. However this assumes you have sufficient home equity in place to extend your home loan.
Even if home equity isn’t a problem, it pays not to overlook personal loans. If you’re renovating to achieve a quick sale, a personal loan will leave home equity in tact – and you could find it takes far less time to organise a personal loan than to refinance your home loan. Chances are the upfront loan costs are also a lot less for a personal loan.
One of the big advantages of a personal loan is that you have a known schedule of monthly repayments coupled with a fixed loan term. This makes repayments easy to budget for, and you have the freedom to select a loan term that fits the time taken to complete your renovations and secure the sale of your property.
The interest benefit can be surprising
Most personal loans run for between 1 and 7 years. That’s a lot less than the typical home loan term of around 25 years – and this provides another benefit for home owners. You see, although the interest rate on personal loans may be above home loan rates, it could end up costing you more to fund renovations through an extension of your mortgage.
That’s because a personal loan is usually repaid over a much shorter period. So there’s less time for the interest metre to tick over, and that could save you on interest.
Talk to your local Aussie broker
Your Aussie broker can help you decide whether a personal loan is the best option for you to fund home renovations – and find the personal loan that’s right for your circumstances. You may even be able to add a bit extra onto the loan for a new holiday, after all, you could probably do with a break after all that renovating.
If you had the chance to renovate one room in your home – which room would it be and why? Share your answer in the comments below!
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