Australians and Renovations and the Financial Impact

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According to a recent survey, over 56 per cent of Australians have already finished renovation in their homes since moving in and another 20 per cent with ongoing plans to do so. Moreover, housing professionals warn that this could be detrimental as the value may be lost especially after making bad financial choices. A reason as to why residents renovated was to add value from the original price. Also, when one does not have the finances to upgrade to a better house, they prefer renovations. Susan Mitchell claimed the high barriers of entry into Australia’s largest capitals discourage potential buyers.

Also, moving to another place has proved to be cumbersome. When planning for a renovation, Sally Tindall advises homeowners to start by using the existing mortgage on strict terms of paying the debt. Banks have a policy for homeowners with a better credit score as to their repayment of the lease. If one has proper credit, they can get up to 80 per cent of the total cost of the home. However, as the deal sounds sweet, there is a catch. The funds are limited to available equity and high compound interest, especially if the plan is 20 or 30 years-long.

Apart from mortgage loans, construction loans have come up to the aid of the renovators. They required extensive paperwork as compared to the mortgage loans. Building plans, blueprints, and council approval were some of the requirements that the bank had for the application. Experts, however, recommend a person with good credit score should consider getting a personal loan. The loans have a higher rate than most of the other categories. However, this applies for shorter borrowing terms. It means that if it were on compound interest terms, the duration would not hike the interest rate to be paid. If the supplies are minimal, then using a credit card is worth.

With the map, there is no interest rate to be capped or even a duration of time required to repay. When using the credit card, it is a one-stop-shop affair. Some Australians like Racheal Taylor and Jake Burn purchased a house and renovated it on their own. They possess the skills of a painter and a carpenter. The couple continued to advise new homeowners to get professional help if they do not possess any skills. Mr Burn who has been involved in the renovation business as a carpenter has given time and money the top priority in a successful renovation plan.

Read More: http://www.abc.net.au/news/2018-07-05/chart-of-the-day-credit-card-debt/9940612

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