Budgeting for your house renovation is not exciting, but it matters — a lot. The financial side of your project is a common source of stress, so it is imperative to straighten everything out before moving forward.
Unless the sky is the limit when it comes to your budget, any expert in interior design and renovation in Singapore will warn you against making any of the mistakes below:
Taking Out a Personal Loan
On paper, you can use a personal loan to fund your house renovation. It can give you access to a large sum of cash to give you more financial latitude in deciding what to include in the project.
However, simply because you can use a personal loan for your home renovation does not mean you should. This financial product actually makes your project much more expensive, as it involves more interest and higher processing fees.
What you should search for is a renovation loan. It can unlock the same amount of funds as a personal loan, but it comes with less interest. If you compare the monthly personal loan and renovation loan payments, it will be apparent that the latter is much cheaper.
Planning the Project Before Applying for a Loan
Finalising the details of your renovation before you qualify for a loan is a huge waste of time and energy. If you could not borrow the amount you require to turn your dream project to reality, you would be forced to make concessions or put it off until your credentials improve or save more money.
Approach as many financial institutions as possible to gauge the maximum amount you can borrow. You can shop around online, but understand that a lender will approve your application only when you submit the necessary documents.
Of course, you have to request for estimates from interior designers or building contractors, so you can present them to your prospective lenders. You cannot take the next steps in the renovation process until your loan application is approved.
Taking the Contractor’s Word
Verbal agreements mean nothing in renovations. At the end of the day, the only things legally binding are those stated in the contract. If the products or services you expect are not in writing, then you cannot get them without paying more than what was initially advised to you.
It is important not to be sold on any professional’s personality. Hire someone who can capture your vision and is easy to communicate with, but do not take anyone’s word. Review the contract to make sure that all of the promises verbally made to you cannot be broken without legal repercussions.
Forgetting About Contingencies
Prepare for the unknown. Even the most experienced renovation contractors cannot anticipate hidden structural problems prior to construction with accuracy. Think about other sources of funds to finance any additional work to avoid postponement.
A badly planned house renovation can be a budget nightmare. Exercise due diligence, and consult trustworthy professionals to assist you every step of the way.