But, choose your lender wisely and you may be able to renovate to something fantastic.
With the Australian property market now in the doldrums, many homeowners are choosing to renovate rather than relocate.
And, some lenders are surprisingly generous in what they will let home owners do with the bank’s money.
One mid-tier lender has just announced a new policy for home renovators without requiring them to apply for cumbersome Construction Loans, get DA approval or quotes from licenced builders.
This lender will lend up to 80 per cent of a property’s value (so long as it the loan does not exceed the property’s land value).
Given that many East Coast properties have significant price growth over the past few years, chances are that many home-owners have plenty of equity against which they can borrow for renovation purposes.
And, some borrowers are being particularly savvy. Subject to adequate income, they are renovating the value of a property. Revaluing the property and then carrying out more renovations to 80 per cent of the new valuation of the property.
Tighter lending conditions may mean that you can’t afford that Vaucluse mansion about which you have always dreamed, but with this generous loan, you may be able to turn your own home into a palace.