Ways to fund a renovation
By Amanda Scali

With low-interest rates and possibly the want for more space for you and a growing family, you might be looking to renovate your existing home instead of buying a new one.
 
One of the biggest hurdles you will face when looking to renovate is how you will fund it, and finding the right builder, of course.
 
Here are some options to finance your renovating:
 
 
Use your equity
 
One of the easiest ways to get a bank to finance your renovation project is to use the equity you already have in your home. 
 
The bank will check how much your home is valued compared to how much you owe on your loan. If it's higher than what you owe, they may allow you to increase your debt by a specified amount to pay for the renovation.
 
Redraw on your home loan
 
If you have a redraw facility and have made additional payments on your home loan, you may be able to redraw these funds to pay for your renovation up to a specified amount.
 
Refinance
 
Speak to your bank, or other lenders, about refinancing your existing loan.
You can do this by approaching your lender – or another lender if you are prepared to change institutions – and renegotiate a new home loan that includes the extra funds you need.
 
It may also be a good time to consolidate all your debts, including car loans, credit cards and any other loans, to make your finances less complicated.
 
Take out a construction loan
 
For major renovation projects, you may need to take out a construction loan.
 
With a construction loan, you receive your loan in increments, known as progressive drawdowns, to make payments throughout the course of the renovation.
 
Personal Loan
 
If you don't have enough equity in your home but only want to carry out a small renovation, you may consider taking out a personal loan.
 
Personal loans have higher interest rates, so make sure you can afford this type of loan.