To build and renovate your home can be costly most often people use their home loan to cover their renovation costs. To take out a home loan for renovations will add value to your home in the long run. Listed are 5 easy tips to increase the value of your home.
- Renovations to the exterior of your property: A good impression of your property starts on the outside. Ensure to paint your house and maintain the exterior; old gutters and pipes can detract from the value of your property. Maintain and invest in your garden, a well groomed garden can be a good selling point. The key to renovating your property is to make it inviting and appealing to potential purchasers should you decide to sell.
- Interior renovations: Examine every room in your home; a fresh coat of paint can uplift the entire interior. Kitchen, bathrooms, bedrooms and living areas can benefit from renovations. Replace old flooring, update kitchen furniture, add paint to bathrooms, and check fixtures and fittings in all rooms.
- Plan ahead: Unused items should be discarded or sold. Prepare your property in the event that you should sell it one day. Regular maintenance to the interior and exterior of your home is beneficial to the quality and value of your property.
- Property valuation: After renovating the exterior and interior of your property and after you have removed unwanted items from your home. You can ask a real estate agency to evaluate your property. Build and renovate your property to increase the re-sale value of your home.
- Property auction: Should you decide to sell your property without the hassle and a long waiting period consider property auction. Auctioneers can give you a realistic market value of your property. A list of potential purchasers will view your property; thereafter an auction will take place. Property auctions are in the seller’s best interest as there is no requirement to negotiate on the asking price.
To build and renovate your home by making small changes can add value to your property. Bond applications are available from Findbond.co.za. To take out a home loan to cover home renovations is worth your while in the long run. Conducting property valuation before and after renovating your home will reveal an increase in property value. To take out a home loan for renovations will increase the worth of your property and you will attain a return on investment.
Your bond is an important tool that can allow you to achieve your financial goals quicker if used in the correct wealth generation manner.
Clever use of the equity available in your home loan can prove to be a very valuable wealth generation tool and here are a few ways in which best to use that home loan equity.
By using the equity in your home loan to purchase a vehicle, you could be saving as much as 4% in interest payments but it is important to pay the instalment amount as if you had financed the vehicle at the higher rate over a shorter period. By doing it this way you are saving a lot of money on your vehicle purchase but, if you do not pay what would have been the car payment it will end up costing you a whole lot more. Discipline is the key here, do not use you bond to make a vehicle affordable over the period of your bond.
In a similar fashion, by using the equity in your bond to repay credit card debt and paying the usual credit card payment amount directly into your bond you will again be saving a lot of interest. Credit cards attract the highest interest rate of most short term lending so it is important to be very careful with your credit card once the debt has been paid off from your bond. Never over extend yourself again on your card, only use the amount you are able to pay in full at the end of every month and pay the debt reduction instalment directly into your bond and you will again be saving a large sum of money in interest payment.
By increasing the excesses on your home and vehicle insurance you can dramatically reduce your premiums and in the event of a claim, you could easily withdraw money from your bond to finance the excess if required. The key to this strategy is to ensure that you drive carefully and live in a secure manner. Insurance is meant to be for unusual happenings but today it is often seen by people as an item replacement option, hence the high instances of insurance fraud in South Africa. Drive a little slower, never drive drunk and be vigilant around your home and you will save yourself a fortune in insurance payments with this strategy.
Make it your goal to repay your loans as quickly as possible to reduce interest amounts and ensure that you are well versed in the early settlement penalties that some institutions put on early settlement.
One thing to be very aware of is that South African banks require that in order to settle your home loan before the end of the term you as the bond holder are required to give them 3 months notice of settlement. By way of example, if you are selling your home, you must give the bank written notice of your intention to settle your home loan 3 months before the expected settlement date. If you do not settle the home loan in the 3 month period you are again required to give notice of home loan settlement. Never assume anything when it come to South African banks, call your bankers and get the answers before you do anything out of the ordinary, it could save you a lot of money.
Applying for a second bond is primarily intended for home improvements and not to be confused with accessing equity available in your bond for other reasons like dealing with debt or purchasing other assets.
If you have had your bond for some time and wish to access the equity available, in most cases the bond can be converted to an access type bond which essentially gives you access to the capital amount you have paid off on your bond and you will be able to transfer it without limitation.
If you need to make additions or alterations to your home that will add value to the existing property, you can apply for a second bond to cover the construction costs.
The process of applying for a second bond is exactly the same as applying for a first bond where the bank assesses your ability to make the repayments, the value of the property before the alterations or additions and the value after the improvements. They will then lend a portion of the increase in value to embark on the project subject to certain terms and conditions.
Using a bond originator is recommended in applying for a second bond. It may be an option to move your existing bond from one bank to another at a better interest rate with fewer conditions than to simply accept what your existing bond holder offers.
Remember that a small difference of ½% in the interest rate can mean hundreds of thousands of savings over a long period, so explore all of your options before signing for a second bond and of course a bond originator costs you absolutely nothing.