Are you faced with the difficult choice of whether to renovate your existing home or to move into a new one? Here are some pointers to help you come to the best decision.

Not enough space?

There comes a time in a home when you start to notice you are running out of space.  You could be falling over clutter.  Your cupboards may be full to overflowing.  Maybe there is another child on the way, or a parent is moving in.  The teenagers could need a living room of their own; or more accurately you need a space to contain the mess the teenagers make!

Not the right space?

Perhaps the opposite is true.  Your children are moving out of the house and you no longer need as many bedrooms.  It would be lovely to make some of the rooms bigger or create a guest suite.  Perhaps now is the time to start an B&B venture and generate some income.

There are many reasons why you could be faced with this choice.  Whatever the reasons, there is much to take into consideration to arrive at a decision.

But I love my home!

For many the decision to move or renovate becomes an emotional decision. Despite it being one of the most important financial decisions one needs to make, the heart can rule the head.  The home you are in may have deep sentimental value for you.  You may want to avoid moving at all costs.

It can be helpful to place your emotions aside for a moment, and to consider all aspects before taking a leap of faith.

Determine the costs

A good place to start is to determine the current value of your property.   Take into consideration your bond amount, the area you are living in, the current trends.  You can compare your property to others in the area, or get an opinion from an estate agent.  There are many free calculators available online to assist the South African homeowner to determine the value of their property.

Now consider the costs of renovation.  This should include the materials and labour that will be needed as well as the fee for the building contractor.  Consider if you will use a designer or an architect, and make provision for the cost of drawing up plans and the approval of plans.  Once you have arrived at a figure, add on a further 10% as a contingency, standard practice for building projects.  A further loan may be the best way of financing this initiative.

The next step is to compare this cost with the cost of buying a new house.  Search the Internet, visit properties in areas you like, meet a few agents; establish how much you will need to pay for a new home. Take into account the costs involved such as transfer fees, deposit amounts, municipal rates and taxes, and the cost of moving.

Is the decision clearer?

Now that you have all the costs involved, you should be in a better position to make a decision.  Will the cost of your renovation mean that you over-capitalise on your current property?  If your home is already one of the nicest in the area, your future loan money may never be recouped.  If your home is in the lower bracket of properties in your area, renovation could make financial sense, and a further loan would be money well spent.

Still can’t decide?

It is not only finances that will determine whether you should move or renovate.  Now is the time to take other things into consideration.  You can do this by weighing up the pros of each option.  Something like this:

Pros of renovating:

  •       You love the neighbourhood
  • You are close to good schools
  • You would love to put your personal stamp on your property
  • You have a trustworthy contractor

Pros of moving:

  • You want to change location
  • You want to move to a different school catchment area
  • Renovation will overcapitalise on your house
  • Moving is less disruptive than living in a building site

On balance, for you, which of the two lists is more convincing?  You should now be in a good position to make a decision.

Can a further loan finance your renovation?

If you have decided that renovation is the way you want to go, you can finance your renovation through a further loan.  This will provide you with the capital you need to implement your changes.

Do what is right for you!

Choose the right option for you and your family.  It does not matter which choice you make; it must be the right choice for you.  And once you have made a choice, implement it.

Your home is your sanctuary.  Take a leap!

What is a Bond Originator?

A bond originator can prevent nightmares when buying your dream home.  We have the tools to secure the best financing terms possible for you and the answers to all of your questions. Throughout South Africa, our Homeloan Junction consultants know their way around the business of home buying. Simplify the multifaceted process of home buying with a single contact to deal with the whole lending process.

What can a bond originator do for me?

When you consider the many benefits of a bond originator, you will be glad to have one working on your behalf.  Your estate agent works on your behalf to find and negotiate a purchase contract for your new home; we at Homeloan Junction can take care of finding the finance … and much more!

Homeloan Junction offers services to you both before you find your new home and after signing an agreement to purchase. Before you even begin shopping for your new home, use the calculators on our website. They make it easy to calculate how much house you can afford and what your monthly payment will be. You can then direct your estate agent to show homes to you that are within your price range. Prequalifying yourself avoids wasted time and disappointment.

9 Good reasons to choose a bond originator?

Are you ready to apply for home financing? The benefits of using a bond originator are many.

  • At Homeloan Junction, our advice is free. You pay nothing for our expertise
  • Your bond originator will walk you through the application.
  • Homeloan Junction has built up a relationship with the banks. Your bond originator  will know who has the best deals at any given time.
  • Your bond originator will submit your application to nine different banks,  one of which will have your best deal.
  • Your bond originator will negotiate with the banks on your behalf to secure the best interest rate possible.
  • Your bond originator does all the paperwork for you and explains the benefits of each offer.
  • You could prepare and submit an application to multiple banks yourself. However, an experienced bond originator will likely find you a better deal than you can negotiate yourself.  It will also save you time and aggravation. Remember, this is a free service.
  • Homeloan Junction has an impressive approval rate for home loans.
  • Your bond originator will work with your estate agent to make sure all agreed to terms are met in a timely manner.

Do you need these home loan services?

Bridging Loans: This short-term loan bridges a time gap. Your contract to buy calls for funds on a specific date. Your funds may not be available until 90 days after that date. What do you do?
Bridging Loans will prevent a delay, allowing you to uphold the terms of the contract. Bridging loans are the solution for those buyers unable to coordinate the purchase of a new home with the sale of their old one.

Home Improvement Loans: Home improvement loans are secondary home loans. Use one to remodel a kitchen, add a pool or an extra bathroom. They are also a lifesaver when homeowners need expensive emergency repairs. The payments are usually small and extended for several years.

Personal Loans: Personal loans are smaller than major home improvement loans. You can secure these flexible loans quickly and often over the telephone. This kind of loan will allow for quick completion of your new home décor. Maybe you need a new bedroom set complete with a memory foam mattress. Sometimes furniture and curtains from the old house do not work in a new one. The payoff term of a personal loan will be between 15 and 60 months but you can always pay it off early.

Investment Property Loans: Buy a house to let as an investment for your future. American billionaire Warren Buffet recommends investing other people’s money to gain the greatest return. You borrow the money to buy an investment property and the lessee pays back the loan in rent to you.

In twenty years, you have a valuable asset free and clear. You can sell the investment property or borrow against it. Use the funds to pay for university educations, weddings or early retirement.

Homeloan Junction is your point of contact for complete home loan services. Our experienced bond originator are sure to find the best rates and terms to fit your financial needs.