If you are in the middle of making the decision whether to build or renovate an existing property, you must take into consideration that the rules are different for structural renovations and cosmetic home improvements.

While the loan for cosmetic improvements can be a quick and easy equity loan, it can be a much more complex process for structural renovations, especially if you don’t have what is deemed to be a sufficient amount of equity in the home. In this case, equity can often be recalculated by adding on the value that the structural improvements will add to the property.

For a new home, the process is more straightforward—you simply apply for a new home construction loan. However, this process isn’t simple either as you need more documentation such as building contracts than you would with a conventional home loan.

When structuring a new home loan, it is important that your funds become available right when you need them, allowing you to cover the costs of building your new home. We always recommend including an amount in your budget for overrun and then put even more in for unexpected expenditures. You may also have to move out of your home and into a rental for a while, producing extra rental and moving costs. All of these should be figured in while applying for the loan so you don’t get stuck later.

Once you have started the application process, you cannot change the amount you are applying for, so it is crucial that you absolutely, positively get it right the first time. Though tax implications should be handled by your accountant, your Smartline Rockingham home loan adviser will speak to different lenders about their terms and conditions to help you find the right loan for your current financial and living situations.

• More information on how to find the right loan
• Learn more about the process of using a mortgage broker
• Use our “How Much Can I Borrow” calculator or our home loan calculator
• Talk to a mortgage broker about your next step towards obtaining a home loan