Home renovations before/after switching bond?

Uraeus

Well-Known Member
Joined
May 26, 2010
Messages
270
Hey folks,

I have a bit of a dilemma I'm hoping some of you folks can help with.

I've been REALLY wanting to switch my bond to another institution as am on prime +3.5% with Nedbank.
This was due to my wife not working when getting the bond, and I had to take full responsibility for it.

Now 3 years down the line the household income has doubled, and I think the lender will be willing to give a better rate.
Since we moved in we have done quite a bit of renovations, e.g. Pool, tiling, cupboards etc.

I've been wanting to do more renovations, e.g. Build retaining wall, some paving, redo kitchen etc.
and I dont know whether to do this before or after I try to approach an institution. What does the lending housing inspector/assessor look for?

Dilemma 1)
Should I do renovations before/after approaching bank?

Dilemma 2)
I've recently joined a new company, how long should I wait before approaching an institution?

Any advice/tips/suggestions would be great
 

P924

Expert Member
Joined
Jan 18, 2010
Messages
2,571
If your renovations have improved the property and increased its value, the risk to the bank is lower so you should get a lower rate. (This is also true if the property has increased in value for any reason since you got the bond. And also if you have paid off a portion of the bond.)

If you have a salary slip, you probably don't have to wait.
 

CamiKaze

Honorary Master
Joined
May 19, 2010
Messages
14,749
This might be unrelated, but did you update your houses' blueprint with all the changes that you added to the house?

I am moving to my new house tomorrow and this bastard agent does not want to tell me if the municipality has the latest version of the house as a blueprint. It can cost quite a pretty penny.
 

Uraeus

Well-Known Member
Joined
May 26, 2010
Messages
270
If your renovations have improved the property and increased its value, the risk to the bank is lower so you should get a lower rate. (This is also true if the property has increased in value for any reason since you got the bond. And also if you have paid off a portion of the bond.)

If you have a salary slip, you probably don't have to wait.

I'm sure it has increased in value. I guess the bank can just look at like 3-6 months bank statements aswell showing regular income. This should be good enough?
 

Uraeus

Well-Known Member
Joined
May 26, 2010
Messages
270
This might be unrelated, but did you update your houses' blueprint with all the changes that you added to the house?

I am moving to my new house tomorrow and this bastard agent does not want to tell me if the municipality has the latest version of the house as a blueprint. It can cost quite a pretty penny.

We did update the plans for the big things, e.g. Retaining wall. Small stuff like tiling we didnt update on the plans. Dont the plans become an issue when selling the house?
 

CamiKaze

Honorary Master
Joined
May 19, 2010
Messages
14,749
We did update the plans for the big things, e.g. Retaining wall. Small stuff like tiling we didnt update on the plans. Dont the plans become an issue when selling the house?

Yeah it does. It was just something that was mentioned to me then I had to enquire.
 

P924

Expert Member
Joined
Jan 18, 2010
Messages
2,571
I'm sure it has increased in value. I guess the bank can just look at like 3-6 months bank statements aswell showing regular income. This should be good enough?

No, a salary slip is required. If you are a permanent employee it decreases risk a lot.
 

Uraeus

Well-Known Member
Joined
May 26, 2010
Messages
270
Are you planning on financing the renovations via the home loan?

I was hoping on doing that, i.e. extending the home loan for a bit more. But what are the chances the rate will go down, if the loan amount increases? I would prefer a lesser rate in the end of the day.
 
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