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Four questions every home renovator should answer

home renovator imageWhether it’s making much-needed changes to the family home or flipping a property for profit, thousands of Australian homeowners go down the renovation path each year. The latest figures from the Australian Bureau of Statistics show that Aussies spent over $2 billion on alterations and additions to their homes between June and September 2017 alone. But while your focus may be on trying to turn your backyard from overgrown jungle to relaxing paradise, there are some important things you’ll need to know before you swing a hammer.

Does my home loan provider know?

Not all renovations are alike, so the size and scope of your project will determine whether or not your home loan provider needs to be kept in the loop.

Chances are your bank’s not going to want to know about a new coat of paint on your walls, but when it comes to larger, structural changes to your property you should definitely get in contact with them. After all, if you’ve got a mortgage, the bank is a part owner of your home, so it will want to know about any alterations that could positively (or negatively) affect the property’s value and the security it has over your loan.

How should I finance it?

If a new kitchen or backyard pool have been top of your wish list, you’ve probably been busy saving in order to make that dream a reality. And while it’s great if you can pay for your renovation project with your savings, sometimes you need a bit of extra help - especially if something goes wrong during the renovation process. So what are your best options when it comes to obtaining extra finance?

Again, it depends on the size and timeframe of your project. Say you’re in need of some urgent landscaping, it may be worth opting for a small personal loan which can be approved in no time and will save you from going through a longer process with your lender. That way you can get work started as soon as possible.

Having said that, if you’re undertaking some serious renovations you’re likely to save more by going through your existing lender. If your home loan allows it, you should always look to re-borrow your extra repayments using redraw if you’ve been making extra repayments - especially if you can redraw for free online with a deal like Greater Bank’s Mozo Experts Choice award-winning Great Rate Home Loan. But if not, arranging a small increase on your home loan with your lender will be a much better value option than a personal loan or other financing option.

Am I adequately insured?

Contacting your insurer to make sure your home is sufficiently insured should be one of your first priorities before renovating - this way you can be certain that a renovation-related claim won’t be rejected because of a lack of cover.

This is particularly important when it comes to legal liability, especially if your renovation requires lots of tradies working on site, because you’ll want to have the appropriate cover in place in the event of an accident or injury.

Likewise, if you’re conducting a larger renovation as an owner-builder you should look into getting an owner-builder licence and taking out construction insurance before beginning any work.

Does my local council approve?

Depending on the type of renovation you’re undertaking and the location of your property, you may need to contact your council for approval. This applies to structural building changes in particular, and many councils and local governments will also require you to lodge a Development Application (DA) and construction certificate after speaking to one of their planners.

Bare in mind that this can be a lengthy process, so be prepared to allow a few months for your council to undertake it.

Steve Jovcevski is a property expert at mozo.com.au. With an extensive knowledge of home loan products and property trends, Steve is full of practical tips to help first home buyers, refinancers or investors build and get the most out of their property portfolio.

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