Getting the financial foundations set for building a home

A small house with coins in front with a person holding it in their hands. They are planning to get a financial loan to build or renovate a house.

Scott Palazzi from Loan Market shares his tips on setting up your financial foundation for building or renovating a home. 

The process of building or renovating a home is often challenging with the most daunting aspect being the organization of finances. 

If you’ve gone through it before, you understand that it can be more complex than securing an average mortgage.

Whether your plan involves purchasing land for construction, renovating an existing property, or selling and buying a new home, establishing solid financial foundations before diving into the project is crucial.

To ensure success in your next home endeavour, consider the following key tips:

Assess your borrowing capacity

A common mistake is not determining how much you can realistically afford before envisioning your project. Understanding your borrowing capacity not only aids in strategic planning and budgeting but also prevents overextension of monthly commitments.

Evaluate your interest rate

For those with existing home loans, periodically reviewing your product and rate is essential. In today’s competitive market, maintaining a “set and forget” mentality can cause you to miss out on potentially better offers.

Examine your equity position

This especially applies if your plans involve renovation or buying/selling. Knowing the amount of equity you can leverage is crucial. Seeking a real estate or online property appraisal provides insight into your current standing.

Scrutinize your expenses

Understanding your monthly expenditures is vital for identifying areas where you can cut back or improve. Lenders increasingly rely on living expenses when assessing home loan affordability. 

As a local mortgage broker, I play a crucial role in assisting you with these considerations before the banks assess your application. Acquiring this information upfront allows us to establish a solid foundation for your future project, increasing your chances of securing crucial bank approval.

Scott Palazzi – Loan Market
0413 747 283

Read next:

Ask the Experts: Could debt consolidation be worthwhile?

Why 2024 could be a good time for first-home buyers 

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