Home improvement has become popular nowadays for people have determined that renovating their current residence is much cheaper than selling the house or buying a new property. If a borrower decides to sell the property, he will be tagged with agent’s fees. Likewise, buying a new property would entail a new set of moving costs, stamp duty fees and the stress of packing up and moving again.
Because of these entailed expenses, it cancels the benefits that you have acquired when you moved in to that property. Due to that reason, more borrowers are going for home improvement loans rather than a new set of home loans.
A home improvement loan is ideal for families who are growing in terms of members. All they need is a bigger living area or more residential amenities to cater everyone’s needs. Thus, adding one or two bedrooms, a pool or another kitchen costs cheaper than buying a new home.
The cost of renovating a house is way cheaper than what borrowers think. With a small renovation cost, you may greatly improve the value and equity of your home. Therefore, going for a home improvement loan is more practical than buying or selling. Also, renovating your home is a great way to give your property a fresh new look.
Home improvement loans come in many forms but the more prominent forms of which are the redraw facility, equity loan, line of credit loan and the construction loan. The redraw facility allows you to have extra repayments to your loan while having the chance to draw these funds when needed. This type of home improvement loan encourages borrowers to make extra repayments to save on interest costs.
The redraw facility also gives the borrower an access of funds when needed. Meanwhile, the equity is the difference between the property value and your loan. A 200,000,000 IDR loan with a 500,000,000 IDR property gives a borrower 300,000,000 IDR worth of equity. This equity amount can be borrowed for renovation or...