Scoping Your Construction Budget

Market Research

Search recent local sold listings to assess where your home may fit in the market. You can find these on national real estate listing sites or, if you live in NSW, through the government Valuer General website.

Pro tip: this may be the stage you reach out to local real estate agents for an appraisal and discussion around what buyers look for in your area.

Gather your numbers

What is the remaining amount on your home loan? The difference between this and your current property value is the equity you hold in your home. You can utilise this to fund all or part of your project. It’s also key to assess how much income you can realistically dedicate to additional mortgage repayments to finance your renovation.

Pro tip: engage a trusted credit advisor at this stage. They’ll be able to start running these numbers for you and present you with the best finance options based on how much equity and income you hold.

Scoping the works

Consider your ultimate renovation goal and its associated costs. This might be the time to begin interviewing and quoting with trades. Remember to keep in mind what are must-haves or nice-to-haves in relation to your end goal.

Pro tip: if you’re not confident with the design or project management process, look at engaging architects, interior designers, builders and other trades early on in the process. Once you have an idea of the scope of works, check in with your credit advisor to ensure your finance product covers it.

Finalise your funding

Now you have an idea of what you want to achieve and how much you’ll need to achieve it, you can finalise the amount and type of funding you’ll need. Remember, when using home finance you’ll only be able to borrow up to 80% of your properties current value without invoking Lenders Mortgage Insurance.

Pro tip: keep in mind the project management triangle when assessing the scope of the renovation – quality, time, cost. Balance between these is key to a successful project but, as a general rule, you’ll probably be choose 1-2 of these and compromise on the others.

Ready, set, renovate

Once your funds are deposited in your account you can get started on your property improvements. Dependent on the finance appropriate for your improvements you may receive a lump sum payment from your lender or work with your lender/credit advisor to organise your first progress payment.

Pro tip: an experienced credit advisor will be proactive. Not only will they check in periodically to see if you’re satisfied with your finance product, they’ll also continually reassess the market for more competitive options and present them to you if they are a good fit.