Living spaces are where we have the freedom to grow and change at our own pace, choose the kind of ambiance, décor, facilities and features that we want. They reflect our lifestyle, status and personality.
Our needs and wants undergo dramatic changes with each stage in life. As newly-weds, you enjoyed a more relaxed lifestyle, with not too many possessions. When the kids come along, you need different furniture, safety, and kid-friendly materials. As the children grow up, they need their own space to study and rest. In time, they leave home, and you find that you no longer require many of the interior décor features that exist in your home.
With this timeline in mind, you may wish to redecorate, repair or renovate your home at different points in your life. If yours is an older home, you may need to modernize some of the systems such as the electrical, plumbing and temperature control systems. You may not wish to dip into your savings, and the best option is to consider home improvement loans .
What Are Home Renovation Loans?
This is a class of loan that enables you to undertake repairs, renovation or redecoration works. Whether you want to do this to continue living in the home or look at selling or renting it out, a few timely repairs will increase the value significantly.
These loans help you to fund work on repair of leaking taps, damaged paintwork or ceilings, cracked floor tiles, undertake bathroom and kitchen makeovers, add or remove a room, undertake loft conversion or build an extension. Besides these structural works, you can also use the home renovation loan to purchase new furnishings and fixtures such as hot water geysers, air conditioners, fans and more.
The funds can be used for exterior works as well such as waterproofing, building a wall/fence or adding a patio or driveway.
Difference between Home Loan and Home Renovation Loan
Home renovation loans are available in the form of personal loans or mortgages where the funds intended to fix up the property. Borrowers have to provide the required documentation to show that the funds were indeed used for this purpose.
Home loans are intended only for the purchase of a home, whether to purchase land to construct a new one, or to buy a ready to move in home. You can get a construction loan to construct on an existing property that you own,
Generally, the amount borrowed for home renovations is smaller and the interest rates are lower and there is a fixed rate of interest.
Why Sh ould You Opt For A Home Renovation Loan?
There are several great benefits to opting for a home renovation loan:
Long Term Benefits: You can increase the value of your property with a timely loan to improve your home.
Tax Benefits: There are several tax and financial benefits. Borrowers can avail of income tax deductions up to Rs 30,000 annually, under Section 24.
Simple Documentation: Most banks and housing finance companies offer easier documentation for home renovation loans. The eligibility criteria are almost the same as for a home loan, and existing customers of the bank would find the process easier.
Quicker Processing: Today, you can get your loan approved via a mobile phone app. It’s possible to get the approval in a couple of days, provided the criteria are met. If you already have an account with the bank, the disbursement can be fast-tracked, based on your history with the bank.
Bespoke: Most banks and housing finance companies retain enough flexibility to allow borrowers to customize their home improvement loans. You can use the funds for any improvement related activity, if you can produce the necessary documentation.
Repayment: Here too, there is a greater amount of flexibility and you can repay the amount in EMIs according to your financial circumstances.
Transfer: At some point if you find that you can get a lower rate of interest or better repayment terms from another lender, the home renovation loan can easily be transferred. This facility will depend on the new lender’s terms and conditions.
Add Value: Any home improvement that you undertake adds not just personal comfort. It can boost the value of your home significantly in case you decide to sell or rent it out. Potential buyers tend to look closely at structural strength, overall appearance, modern kitchen and bathrooms, aesthetics as well as functionality.
- Read the eligibility criteria carefully
- Do your research to find the best available housing loan interest rate and terms
- Prepare for the loan application process by maintaining a good credit history
- Get the best value for your money by employing reliable and trustworthy contractors
- Invest in the best top of the line products that you can afford so that they last a long time