Financing Renovations

Over the time since the property was purchased, the needs of the family may have changed.  Perhaps an additional family member or several may now live in the home requiring an extension or it may require some major work to maintain its upkeep and value.  The additional value in the home may now support the money that is required to be spent on it so the improvements will, in themselves, add value.

The same assessment of family income to determine borrowing capacity is required to ensure the borrowers incomes can support the additional funds borrowed without placing any hardship on the borrowers. 

This is an ideal opportunity to also conduct a “mortgage health check” on the borrowers’ current loan.  Lenders almost always offer the best deals to new customers.  They rarely match those same offers for existing clients.  Your mortgage broker will be able to assess your current loan in terms of interest and fees and compare your needs with the market place to determine whether the current loan is good value or whether an alternative lender offers a more suitable product, taking into account the features required and any upfront costs associated with changing lenders including discharge fees, government charges and any fees charged by the new lender.

To refinance to a new lender including an equity release top up loan, a full application and supporting documents will be required and a full assessment take place by the lender.  Your mortgage broker will let you know what documents are required and will lodge the application on your behalf with your instructions.  The extra funds will generally be available in your redraw account following settlement for you to use as you wish and as determined by the lender of choice.  The only exception to that would be if the additional funds are, by definition, for a Construction loan.