Renovation & Construction Loans

A renovation or construction loan can help you make your property dreams a reality.

Whether you are working on your own home or on an investment property, the Sydney Brokers team can help you get the right loan for your project.

    What Are Construction and Renovation Loans?

    A construction loan is a specific financing product designed to cover the costs of your construction project. This may include the materials you need for the project, as well as the labour and any other costs that may arise as you see construction through to completion.

    A renovation loan is similar to a construction loan, but it is designed for a particular sort of project. With a renovation loan, you will gain the funds you need to do up or refresh a property.

    Generally, you will need to cover costs across the full duration of your project, from the planning, preparation and insurance stage through to construction, adding fixtures and fittings and completion. To acquire your loan, you will need to make sure that you have all your documentation in order, as well as the licenses and registrations needed to carry out the work — whether the work will be carried out by you or by a third party.

    Why You Need a Renovation Loan: The Advantages of Improving Your Home or Investment Property

    Let’s take a look at some of the reasons you might need an investment property or home renovation loan. Conducting the right kind of renovations can help you achieve your desired objectives, subject to your financial situation.

    • Increase Your Property’s Value: Renovating your home will make it more valuable, providing you are adding the right elements in a professional and licensed manner.
    • Street Appeal: The right renovations will make your property much more attractive to buyers.
    • Increased Rental Return and Rental Appeal: Even if you do not want to sell your property, you can achieve a significant income stream. Renting your property out can help you to pay interest and loan repayments, including all fees, and can grow the long-term value of your investment.
    • A Cost-Effective Alternative to Purchasing a New Home: Purchasing a new home is generally more expensive than renovating. Getting a renovation loan can help you refresh your property more cost-effectively.
    • Improved Lifestyle: Home renovations can give you your dream home. What’s more, you’re in control, creating a property that suits your lifestyle perfectly.
    • Much-Needed Additional Space: Perhaps you want an extra bedroom or bathroom at your property, or perhaps another addition. Home renovations help you to achieve this.

    Renovation Loan Options: How To Finance Your Project?

    • Construction Loan: You may be able to get a secured or unsecured loan to finance your project. Bear in mind that choosing an unsecured personal loan will result in a different comparison rate and you may need to pay more.
    • Access Equity in Your Current Home: As you pay interest and loan repayments on your existing home loan, you are building equity in your property. You may be able to release this equity to finance your renovation project.
    • Refinance Your Existing Home Loan: Refinancing is one way to access equity in your home. Bear in mind that fees or other charges may apply and you may need to repay a greater loan amount. You will also need to be able to service a new extended loan term.
    • Offset or Redraw Facility: Some loan products include an offset or redraw facility, enabling you to access some of your repayments. This may be available on both variable and fixed-rate loans but will need to be pre-agreed.
    • Line of Credit: A line of credit works in a similar way to a credit card. This is a good option if you do not need all of the money up front and can help you to manage your interest rates.

    What to Consider When Choosing a Construction or Renovation Loan?

    • Licensed Professionals: The work will need to be carried out by licensed and accredited professionals in your jurisdiction.
    • Owner Builders: You will be able to carry out the work yourself if you have the right license. However, the process may be more difficult, and additional documentation will be required.
    • Insurance: You may need to take out homeowner’s warranty insurance, designer professional indemnity, builders contract works insurance, or other insurance policies to make sure you are protected.
    • Current Insurer: You will need to speak to your current home insurer to make certain you have the right cover for your project.
    • Contingencies: You need to be flexible with your project. Make sure there is room to manoeuvre if you need to make changes or increase the scope of your renovation.

    Developer Loans

    Developer loans tend to be more complex than a standard consumer construction loan. These loans come with a warning: the comparison rate may be difficult to navigate due to the increased risk to the lender and because of the structure of the loan itself.

    Here at Sydney Brokers, we provide specialist services. This means working with lenders who can provide the specific type of loan you may need, including developer loans. Speak to our team and let us know what you plan to do and what your project entails. We can connect you with the loan options that best suit these needs, giving you complete insight into all of the fees, charges, terms and conditions so that you can make the right choice.

    Why Use Sydney Brokers

    No matter the size of your project, we are on your side. Whether you are looking to complete kitchen or bathroom renovation to get more from your existing space, or planning to build your new dream home from scratch, we can help you get to where you need to be. With an experienced and expert team, Sydney Brokers applies a customised approach to your project. We listen to your requirements and then work to ensure you have the best rates and loan structure for your situation.

    Most lenders offer construction loan products. However, it takes an expert and objective brokering service to help you find the right option. Let’s get started. Reach out to our team today and schedule an appointment or get the answers to any questions you might have about our service.

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