Renovating your home? Learn how to finance it

27th October 2015

 
 

Most people would say that buying a house is the most difficult step in a person’s life; however there are some who would argue that maintaining it is more difficult. Home renovation is an on-going activity for every individual who is living in his own home. Given the current inflationary pressures in Pakistan, home renovation is not an easy task. It takes months for a family to build sufficient savings for home renovation. However, there are certain easy procedures to finance your home renovation without straining your wallet.

  • The most popular mode of financing for home renovation is to avail a personal loan from your bank or organization. A short term unsecured loan can provide sufficient amount for the required renovation. Because the loan repayment is spread out over tenure of 1-5 years, personal loans for home renovation are economically feasible.
  • Banks that offer mortgage and home financing facilities also provide home renovation financing. For this purpose, financing can be availed for tenures up to 10 years with financing amounts ranging up to 40% of the property value. Since the property is pledged as collateral, the markup cost for home renovation is lower than a personal loan. This option can only be availed if there is no existing mortgage or home loan on your current property.
  • Basic electronic items for household usage can be purchased through credit cards. Banks that offer credit card services, also offer discounts on electronic items. Since credit card repayments allow 45 days of grace period, you can club income from two months to pay off the accruing expense. Home renovation might be slow paced with this technique, but you will spare yourself from markup costs.
  • Some individuals choose to liquidate their savings to finance home renovation. This is only practical if the savings are not yielding a desirable return. Since home renovation adds value to your property, the option to liquidate savings becomes economically feasible.

Financing home renovation varies from person to person and their personal circumstances. However we, at MyBankersOnline, have listed a few methods commonly used for home renovation purposes. For more details on bank loans for home renovation, you can check our listings for home loan and personal loan solutions available in Pakistan.

 

By Saad Niaz

 

 
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