9 Tips for Handling Home Renovation Finances in NZ
In this post, we’re sharing with you some important information on how to finance a home renovation as well as what to do before, during, and after a renovation to make sure you stay within the budget of the loan and pay it off easily and quickly.
When applying for a renovation loan, it’s crucial to assess all the factors to help you make an informed decision. Below are some important things people consider before, during, and after a home renovation or remodelling.
1. Plan your home renovation
Is it just a room addition or an entire house lift? No matter, a minor- or major-scale upgrade will need you to plot your plans for every nook and cranny that demands a fix or a boost. This is why doing research and checking out what part of the home needs a remodel or repair will help you identify the possible expenses—and then the estimated loan amount. By plotting your renovations before applying for a loan, you can sift the necessary from the luxury after weighing your options and time constraints. This is a crucial step especially if you’re taking out a fast loan. Additionally, it prevents unwanted costs from piling up and, most importantly, avoid a delay in payments.
Although it may be easy to understand your options on how to finance a home renovation, coming up with an estimate can be overwhelming.
Learn what you might need to look out for during home renovations by reading ‘Plan a renovation‘.
2. Find the right team
Before a home renovation, it’s essential to sort out your budget and get in touch with a few property builders and designers to get an idea of how much your project may cost. Finding the ideal property contractor and home designer is crucial because they can understand your vision for spaces, and most importantly your budget.
3. Check your house insurance policy
Put your plans side by side with your insurance terms. Does your policy need an upgrade too? Ask your agent which part of your coverage needs a review to make sure that the new additions, accidental losses, or damage during the rebuild, etc. get appropriate covers.
4. Keep a tracker
Keep track of all the expenses to be able to stick to your financial goals. If you’re applying for a home renovation, you may need to take note of the draw-down dates to keep the expenses at bay.
5. Stick to your list
To help you handle a renovation loan, be disciplined enough to stick to your list. Be careful of changes since these can push back your timeline. Always ensure that you have a list of things you need to accomplish and delivery dates. Stick to it no matter what. Also, you should not be hasty in going for a luxurious fixture when it’s beyond the allocated budget.
6. Ask for assistance
When taking on huge projects like a home renovation stress can always seep in and that can be bad for your goals, let alone your health. When it comes to handling the expenses for a home renovation loan, you may need a system of checks and balances. They could be your spouse or a close member of the family—someone you can trust. You can also ask the help of an authorised financial adviser. No matter who you choose, getting an assistant can give you the validation and support when you plough on till the end of the lot.
7. Don’t entertain another costly project
Think long-term and broad. Until the estimated timeframe for your renovations is through, don’t engage in other projects (particularly those that involve heavy financing, unless, of course, they’re foreseeable and had been planned for). The goal is always the same: keep your loan payments timely to maintain a good credit reputation.
8. Check the value of your home post-reno
Do a post-renovation checkup of the value of your home by getting a home value estimate. An upgrade means an increase in worth, which will depend on the scale. But on average, it will increase your home value by at least 50 per cent. Investopedia shares about how much return on investment you can get out of remodelling your home.
9. Try to pay the loan off quickly
If you want to pay off your home renovation loan fast, you need to make sure you’re not borrowing more than you can afford to pay off. In this way, you can ensure that when something out of your control comes up, you’ll still be financially capable to pay off your debt. After your home renovations are completed, most people can benefit from paying off their debt as soon as they can. Additionally, check the lender’s agreements as unlike QuickCash, some lenders charge early payment fees.
To help you hasten the process of becoming debt-free, read our post on ‘How to Pay Off a Personal Loan Fast‘.
Many New Zealanders apply for a home renovation loan to help fix problems like cracked walls, flooded basements, and leaking pipes. Others also get a renovation loan to help them remodel their property and add value to their home. If you’re looking at borrowing money for home renovations, ensure the success of the project with proper planning.
Ready for a home renovation?
At QuickCash, getting a home renovation loan in NZ is a breeze with our fast, easy, and convenient application. There are also no charges for early repayment, so you’ll save money on interest by paying off your home renovation loan quickly and easily. Give us a call on 0800 784 252 or flick through an application and our reliable and friendly representative will get back to you within 25 minutes (during business hours).