Alterations and additions finance needs careful planning, it is seldom that the initial cost turns out to be the final cost, in fact most alterations and additions cost significantly more than was additionally planned.
In the case of alterations, any number of things can contribute to higher costs, including uneven floor levels, damp, eroded piping, old electrical cabling or any number of other unexpected issues encountered during building operations. Then of course there is the cost of tiling, carpeting and fittings which seem to increase as you near completion. When asked what the cause of the excess costs were, a large percentage were frank enough to say that they had already spent so much on the alteration that the extra spent on better quality tiles, carpets, fittings, paint, decorative cornices and other aesthetic items seemed like a little at the time but when they were all tallied up amounted to a large amount of money.
When planning a building alteration it is best to initially cost with the better quality finishes, come up with a figure and then assess the affordability. You can always come down in the finish quality if you see that building cost overruns are getting too high than to sit in a position where you are either unable to complete the planned alteration or that eventual cost will see you struggling to pay for it.
When it comes to financing a home alteration or addition there are a few things to be aware of that will protect you against cost overruns and quality of workmanship. Many people make use of their access bonds to fund alterations which is possible the easiest and simplest way of accessing finance. The trouble with this form of financing is that the bank will not be involved in the building process or the issuing of draws to the builder or contractors. The onus is entirely on you to ensure that the workmanship is of the required quality, that the fittings, fixtures and building materials used in the construction are those specified and required by law. The building industry is fraught with unscrupulous builders that make use of inferior building materials to reduce the cost of construction.
If you choose to apply for a second bond on the other hand, the financial institution will assess the quote, the building plans, and the bill of materials to ensure that they meet the required standards. The builder will also need to be a member of the Master builders association to ensure that there is accountability and recourse in the event of shoddy or incomplete work.
Building and financing of a renovation can be a very stressful exercise and the last thing you need is to sit with an incomplete building that effects your family life.
Contact your bankers and discuss it with them, contact bond origination services and discuss it with them, contact your financial advisor and discuss the most effective way to finance the building work. These services cost nothing until you decide to embark on the project, so do your homework and be protected.