One of the most costly mistakes you can make as a homeowner is holding out too long to renovate. There are some renovations that leave you between a rock and a hard place – expensive to do, but even more expensive if you wait too long to do them. Water damage certainly fits into this category!

Because bathrooms are typically expensive to renovate they are often put off, or patched over until a later date when you have more funds available. The problem with delaying too long is that a relatively minor problem can quickly become a major problem. Water damage is a bit like cancer, it can spread extensively before you start seeing symptoms. By the time you’re seeing paint peeling or tiles falling off walls, a leaking shower may have leaked into your walls, or if it’s in the roof – into the insulation. Now you have a mould problem and potential structural damage – your problem just got much more expensive.

While your first thought might be homeowner’s insurance, unfortunately, this insurance only covers you for damage that’s sudden and not preventable, such as a bad storm. Most insurance policies won’t cover you for damages that could have been prevented with routine maintenance.

One option is to refinance your mortgage to pay to do the renovation properly the first time. Refinancing to renovate is the most popular reason for refinancing and can be a great way to add value to your property. If you’re considering this as an option, here are some things to consider:

  1. Get a valuation done on your home. This will help you work out how much you can borrow. The Loan Value Ratio (LVR) is the value of what you are borrowing as a percentage of your property value that is being used as security for the loan. The lower the LVR, the lower the risk is to the lender.
  2. Look at the sale prices of houses in your area and work out the median property value. It’s a good idea to spend no more than 10% of this value on a renovation, otherwise, you risk over-capitalising.
  3. Use a mortgage calculator or book a free consult with a mortgage broker, to help you figure out the cost of repayments as well as help you to dot all the ‘i’s’ and cross all the ‘t’s’.


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