Renovate or move guide

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1 Renovate or move guide home loans

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3 Your finance journey Are you frustrated with how small your wardrobe is or the discoloured carpet in the bedrooms? Is it time for a change? If so, you will likely ask yourself whether you should renovate or move. Either journey will be exciting and open up opportunities, but has the potential to become very expensive. Your friends will offer their advice on which direction to take, but how do you decide? Before making a decision, it is important that you have all the information and have developed a plan that will enable you to make a rational decision. Our guide will outline the benefits and considerations of each option as well as highlight the costs you can expect to face. Advice is necessary when planning to embark on such a journey, so speak to your Resolve mortgage broker to ensure you are making a decision that is right for your situation and goals.

4 Renovating The facts. Like any commitment, there are a series of benefits and considerations to keep in mind. Knowing what these are, will ensure you are not taking on more than you can handle and that your desired outcome will be the result of your efforts. Why renovate? An additional 10% in in your property s value could be added through renovation efforts. If selling is an option you are looking into (sooner than later), than this would be beneficial of course. Not all homes can be transformed to meet the dimensions of our goals. Before setting your heart on a plan get a building and pest inspection to ensure your renovation plans are realistic as factors such as dry rot can minimise your options. Before you begin your renovation project, Resolve Finance is able to help. Using our specialised tools we ll look at the value of your current property, and compare that to the value once the renovation has been completed. This will help guide the process and establish a budget for your project. Unlike purchasing a new home, you will not face Stamp Duty or legal, registration and real estate agent fees. A key advantage of renovating is the ability to tailor the changes to your needs, whether it is for a retirement lifestyle or growing family. Renovations do not have to be large scale; simple changes such as to the bathroom or kitchen can be effective in increasing value. If the property in question is an investment, renovations can be tax deductible or depreciable over a number of years which will reduce the amount of tax payable. Depending on your renovation goals, you can save money on energy and water by implementing initiatives that will achieve this. Renovation considerations. Renovations cannot fix all issues you have with your home. For example, many people dislike the location of their home and therefore, moving is the suitable option for them. Consider whether it is a new lifestyle you are seeking as opposed to simply a new or upgraded home. The cost of renovations can be underestimated; it is not uncommon that mishaps occur along the way which can extend the renovation period which as a result with incur higher costs for tradesman and parts. It is important that you do not end up spending more on the property than you could sell it for.

5 Steps to renovating Renovating is a big decision, which is why there is a series of factor you must consider and do to ensure your desired result is achieved. 1. Estimate costs properly. Before sitting down to determine a budget, sit down and establish your goals. For example, if you want to add an additional bedroom get three quotes on it so you can what the costs average at. You cannot set a realistic budget without understanding how much your goals are going to cost to complete. 2. Research market trends. Although renovations bring out the creativity in us all, it is important to consider the impact your renovations could have on the properties resale value. Although you have decided that renovating is a more suitable option for you than moving, this may not always be the case. You must have a consideration for future owners who may be looking for outdoor entertaining areas before you decide to turn the back garden into a personal golf course. The purpose of your renovations should be to add value to your property and to support your current lifestyle. 3. Don t cut corners. Make sure that your renovations are completed using the best quality labour, tools and materials that you can afford. When renovators cut corners it commonly backfires in the future as repairs are then required. As the saying goes, it is best to do it right the first time. Make sure your contractors are experienced, qualified and licenced before hiring. 4. Know your limits. Knowing exactly where your money is going and sticking to your budget it is vital. Make sure you are keeping hold of your receipts as this will make spending much easier to track. To ensure you do not go over your limits you may also want to add an additional percentage to your proposed costs. Whether your final decision is to renovate your current property or purchase a new home, speak to your Resolve mortgage broker. Dedicated to being your finance partner for life, your mortgage broker will be there to help you every step of the way.

6 What s available? Your renovation options. When you love your home, its location and your lifestyle, moving may not be the best alternative for you. Renovating can be a great way to keep the home you love, while adding value and upgrading your lifestyle. Some of your finance options when renovating may include: broker before you go ahead, to ensure you understand the differences between a normal home loan and a construction loan. For more information, see our Construction Loans page. Not only will your Resolve Finance broker work with you to find the best finance option for your renovation, if you undertake the renovation work using a builder, we can also liaise with them. This streamlines the process and gives you time to relax, and focus on your fabulous new lifestyle in your newly renovated home. Using equity in your home. If you have sufficient equity in your home, you may be able to top up or redraw on your current loan. These are both popular options, and may provide a fast solution for minimal cost. Personal loan. If you don t have as much equity in your home as you would like, it may work better for you to take out a personal loan for your renovations. A construction loan. Depending on the scope of your renovation, a construction loan may be the best option. Discuss it with your Resolve Finance

7 Your next home. The facts. If you re tired of driving too far to work or sick of the noisy neighbours and cracks in the wall, a fresh start in a new home may be the best option for you. Why move. Our lives are constantly changing and a number of factors can create the need to move. You may need to move closer to your work or your children s school therefore, eliminating renovations as an option for you. There are a lot of costs involved with moving house, the most common include: stamp duty, selling costs, real estate fees and moving costs. It is important to calculate all of these costs and establish whether you can afford to make such a move. Changes occur when you move houses and that is something that must be considered before making your decision. Are you willing to travel an extra 15 minutes to work or find a new local coffee shop? Take careful consideration in choosing where your new home should be located. If you have made extra mortgage repayments over the course of your loan or your property has increased in value since you purchased it, you may be able to access the equity and use it as a deposit for your next home. If your current home is old and causing you more problems than you believe it is worth, moving is a great option especially if you do not believe your current home will suit your needs even after completing renovations. Many home owners believe they made mistakes when purchasing their first home, whether it was related to their home loan or the property itself. Buying a new home gives you the opportunity to reconcile these mistakes and end up with a result you are happy with. Moving considerations. The property market is constantly changing and may not be the same as it was when you purchased your first home, meaning you potentially may not get as much for your money as you would have in the past.

8 Steps to buying a new home Many homeowners looking to purchase a new property find the process much simpler as they know what to expect. However, if you are selling the home you current live in also, there are steps involved. 1. Use the equity in your home. Equity is the different between the amount you still owe on your home loan and the market value of the property. Your property may have increased in value in recent years and therefore, you may have excess to equity that can be used to pay your deposit for your new home. Your current home can also be used as security for the home loan on your future property. 3. Work out how much you can afford. You do not want to be in a worse financial position after purchasing your new home than you were prior. Once you have established the equity in your home and spoken with your mortgage broker to figure out all the costs, you can begin to look at how much you can borrow and what home loan option is best suited to you. It is also important that you establish whether your mortgage repayments are likely to be higher on your new home loan, if so you should ask yourself weather moving is in your best interest. To find out more about what you can expect if you make the decision to move house, speak to a Resolve mortgage broker. 2. Understand the costs. As mentioned previously, there are numerous costs involved with purchasing a new home. The costs of finance, stamp duty, real estate agent fees, ongoing costs and moving costs must be considered. Stamp duty is a State Government tax based on the purchase price of your property and is usually paid prior to settlement; this is likely to be your largest expense aside from the property price. Building and pest inspections will also incur a cost as well as the costs associated with using a solicitor or conveyancer.

9 What s available? Your moving options. In a perfect world of buying and selling a home, there would be little to no changeover period as you move out of your old home and into your new one. In the real world, that is rarely the case. You may find the perfect new home much sooner than you anticipated, or your home may take longer to sell than expected. Fortunately, there s no need to wait for your existing home to sell before you buy or build a new one with Resolve Home Loans product Home to Home Loan. A home-to-home loan is a unique product that covers you when the timing of your new home purchase doesn t coincide with the sale of your old one. A home to home loan has many benefits, including: No dead rental outlay. Move only once instead of twice or three times. You have more time to sell your existing property. You only pay one mortgage until your old home sells or your new home is built. This flexible home loan may just be the solution your family is looking for during your upgrade. When looking at your options, you may find it makes sense to keep your current home as an investment. If this is the case, it is not only a great time to look at your refinance options, but the perfect opportunity to work with your Resolve Finance broker to manage your equity and repayment amounts. So no matter what your situation, leave the hard work to your Resolve Finance broker and relax, knowing you are in trusted hands. Live in your current home while you sell your old one, or until building is complete. No hassles and costs of finding short term rental accommodation. No family upheaval.

10 Why choose Resolve? Complete finance solutions. Buying a new home is such an exciting, busy and involved time, it s easy to get overwhelmed by the avalanche of details. That s why we built a one-stop-shop giving you one source for everything from home loans through to settlement and beyond. Whether you re a first home buyer or an experienced property investor, Resolve Finance offers you a complete financial solution. We stay with you throughout your journey. Access to a range of property and investment opportunities through our partners. All your finance needs can be met in one place, giving you consistency, continuity and service levels that other finance providers can t match. Whenever and however you need us, we re ready to help you achieve your goals. We have all the services you need to set you on the right path to a secure financial future, and we re committed to assisting and guiding you throughout the entire journey, from your first home through to wealth accumulation and your transition into retirement. With Resolve Finance, you ll have a finance expert in your corner every step of the way. The Resolve team s personal service gives you: Your own Resolve Finance mortgage broker, with access to home loans from a panel of over 28 lenders. Unique and niche Resolve Home Loan options to suit your specific needs. An integrated Conveyancing team. A complete Financial Planning service. Personal Finance and Insurance options.

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