Renovation is a part of every household story
after a good 5 -7 years spent in the original set up. So, when the time comes to
give your home a facelift, you need to make immaculate planning and processing.
If it's just about making a few tweaks here and there, cashing it shouldn’t be
a big deal. However, major upgrades such as remodeling your kitchen or
renovating your interiors will take a toll on your finances which is where you
consider taking a renovation loan.
Here are a few points that you should note so
that you don’t end up being financially hurt.
Avoid Going For The Maximum Loan
When going for a renovationloan Singapore banks can offer the highest loans on lucrative
interest rates. The average amount often quoted by contractors would be
somewhere around $30,000 plus. Before agreeing for the same, ask your
contractor what can be done in less than that, say around $15,000 to $20,000
and you may be surprised as that could suffice your needs. Also, tighten your
budget as much as possible and consider paying it sooner so that it doesn’t
affect your existing loans, if any.
Consider Your Purpose
There could be many reasons as to why you are
renovating your property: to prolong its livability, upgrade or fix a
particular property to sell it out or put up for rent. In case of renting or
selling purpose, you will spend logically and not a penny more. However, if you
are doing it for personal reasons, chances are most likely that you might end up
doing emotional spending which could exceed your original budget. In this case,
sticking to your limit should be your top priority by listing out all the
pricings beforehand with sufficient cash back up. A mix of both cash and loan
should help you carry the load with ease.
Independent Properly Value
Try to know the independent valuation of your
property. This will help you get a good idea of the value of other surrounding
properties in your neighborhood. This way, you could protect yourself from
overcapitalizing your assets and work out on your spending amount accordingly. You
need to ensure you are not overdoing it as your unnecessary upgrades could
price the house out of its neighborhood.
Make Renovations On Areas With Higher Returns
The statistics may vary from area to area,
however, certain sections of the house such as the kitchen and the bathroom
will definitely yield higher returns than the rest, almost adding 70 to 80
percent value to the current price. So, consider upgrading them before focusing
on other interiors.
Go For Flat Rates
Always go for loans which offer flat tax rates.
This would give you a predictable financial status at all times. And if your
contractor agrees, split the amount into three cheques so that you can pay him
as the work progress and go easy on yourself. Plus, this will protect you from
possible scams. For that, an additional $10 on each cheque is worth it.
A wise option would be to go for credit
cooperatives like TCC in Singapore. They offer reno loans at competitive rates
with flat 4% interest rate. They also offer other services like telephone banking & internet banking and common good funds. You can go through their website for the
details.
