The basics of refinancing to renovate

There are a number of situations in which refinancing to renovate is a good idea, and it can be a smart financial move if you manage the process well. Perhaps you inherited a home that’s falling apart, need more space to accommodate a growing family or want to renovate for resale and increase your capital gain in a growing market.

Whatever your reasons, reorganising your finances and unlocking equity could be the key to getting exactly what you want out of your property. Before you sign on the dotted line, take a look at the following tips to make sure your renovations are completed without a hitch.

Refinancing may be the key to getting what you want out of your home loan.

Leave time to deal with your current lender

When refinancing you may find that there are some hoops to jump through when transferring your mortgage from your older lender to the new one. Be prepared to fill out a number of forms required to release you from your current loan, and perhaps even send and receive them via snail mail.

While this may be inconvenient, if you allow time for a few small setbacks it shouldn’t affect your plans to renovate.

Rebuilding or renovating your home may increase its value. 

Be aware of the costs and risks

According to data allocated by Canstar, the costs of refinancing with most major banks will be between $550 and $1,000. The figure could even exceed this amount, so it’s essential that you leave wiggle room in your finances to account for this cost.

A Mortgage Choice broker will make all of the costs and risks clear and advise you on the course of action to ensure that your renovations are a financial breeze.