Finance options for renovations

Hi all,

We are looking to do a major renovation in the next few years involving the total installment of a new kitchen, reno of the old bathroom, adding a back verandah, and raising the house.

I am not sure of the total costs yet (although I do have a horrorfying figure in my head). I have done a budget for the bathroom and I think we will pay cash for that.

My partner wants to pay cash for the other things (big $$!) but I am wondering if I might have some other opinions? We don't have the cash together for a reno like that, we would have to save and that would take an estimated four to five years to save for.

I was wondering what other payment options others have opted for? We only bought our house in September last year so we wont have much redraw power yet.

The reno was planned right from the beginning of buying the house, as it is a great old Queenslander in the right area, so the $$ spent will still make it a great investment.

Any opinions are welcome!

Thanks,
Kim

We bought our house (in Brisbane) in January 2006 at a good price and had the power to 'top up' our existing loan by $40,000 no problems after 12 months.

We're about to restump, build front and rear decks totalling 80m², remove an asbestos roof and a metal tile roof and replace with Zincalume, new gutters, insulation etc.

If you want to finance all the renovations without using a builder, you'll need to do it as an Owner Builder, in which case I don't know of any bank who will lend you more than 80%. Otherwise, you're stuck with a builder, and they do cost a lot more.

Cheers,
Lotte

Hi if you are using a builder you will need to organise a fixed price contract, the lender may do a valuation on the end product which will give you an instant increase in equity.