If your property is no longer ticking all the boxes, we’ve collected a few of the major pros and cons you should consider before you decide if you should stay or go.
Renovating your home
Deciding to renovate can be an exciting challenge! You get to tailor make the changes that you want and design everything to suit your style and budget. Plus, if you consider yourself construction savvy (or you have a few mates who are) you can save yourself some cash in manual labour by tackling the renovations yourself.
On the flipside, you need to prepare for lots of decision making and disruptions to your day to day life for an extended period of time. Renovating can be noisy, messy and inconvenient so it’s important to consider the impact it will have on your lifestyle. It’s also time-consuming – and that’s before you’ve factored in extra time (and money) for unexpected hiccups along the way.
It’s also not cheap. A recent study which compared quotes from 52,000 tradespeople across the country found that depending on where you live renovations can cost as much as $70 per hour1! Multiply that by 7 hours a day over a few weeks and you’re looking at a big chunk of cash.
You may also have to get council approval before you build or renovate- but it’s best to check with your local council to find out before you start.
Selling your home
Selling your home has the benefit of being much simpler than renovating; simply move into your new home with nothing to do but unpack! You don’t have to put up with the inconvenience of living among chaos for months on end and you can determine most of the costs up front.
However, it’s unlikely you’re going to find everything you want in an existing property so you’ll probably have to compromise on some features. There are also a number of costs associated with moving including stamp duty, removalists, agent fees, refinancing, pest and building reports and more.
Weighing it all up
Make a list of the things you are currently unhappy with in your home. Is lack of space an issue? Do you need to make major repairs, or upgrade your kitchen or bathroom?
Once you have established what changes are needed, source some prices and quotes so that you can get a reasonable estimate of how much your renovation might cost.
Similarly, if you’re thinking about selling to buy a new home you’ll need to work out:
- How much can you spend?
- How will your new mortgage repayments impact your budget and cash flow? Use our repayments calculator to see what you’ll be paying.
- Will you need to borrow more than 80% of the purchase price of your new home? If so, then you’ll need to factor in the added cost of paying LMI (Lenders Mortgage Insurance).
Financing Your Decision
If you decide to stay and improve your current property MOVE Bank can offer a few options for financing your renovations.
- Top up your mortgage: If you have your mortgage with us and have sufficient equity in your property why not look at topping up your home loan to cover the renovations?
- Low on equity? Applying for a personal loan might be an alternative option for you.
If you don’t have your mortgage with MOVE Bank now could be the time to consider re-financing!
If you decide to sell and purchase a new property, MOVE Bank offers:
- Finance pre-approval so you know how much you can borrow
- A mortgage coach, who will step you through the whole process from start to finish
- Mortgage comparisons – so you can see how much you can save by bringing your mortgage over to MOVE
- Some of the most competitive home loan products in the market
If you still aren't sure whether you want to renovate or sell, or you want to find out more, why not talk to our lending specialists? - they’re here to help you.
1 Source: http://thenewdaily.com.au/money/your-budget/2016/02/03/house-renovation-costs
This blog post is for general information purposes only and is not intended as financial or professional advice. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product or other professional advice. You should seek your own independent financial, legal and taxation advice before making any decision about any action in relation to the material in this article. Railways Credit Union Limited trading as MOVE Bank ABN 91 087 651 090. AFSL/ Australian Credit License number 234 536 | ABN 91 087 651
