Financial Planning

If you are intending to make improvements to your home there is no getting away from the fact that they are going to have to be paid for. The question is ‘How?’. This will be best answered by employing the services of a financial planner. Whether your project is large or small they can analyse your household budget and based on the amount of money required for the home improvements determine which is the best method of financing it.

When a financial planner is helping you to plan a garden or home renovation project, their overriding objectives are to ensure that your cash flow is sufficient for you to complete the project and that there is no risk of you being unable to meet your normal commitments.

For smaller projects such as decorating, the amount of money required will not normally be that high, and it could be you are happy and willing to fund it from the cash you have in your savings account. It may well be that this is what your financial planner advises, however, they will assess if the increased value of your property covers any loss of interest you receive.

Another option could be to use a credit card, and again equity increase will be assessed against the extra interest you might pay to your card company. This may be where your financial planner compares the credit cards that you have for the best option, or they may even advise getting a new credit card, where a zero-interest introductory offer is available.

Larger projects which may cost five-figure sums certainly need to be planned carefully, both in terms of the work, and the financing of them. You may be in the fortunate position to have this amount saved, but paying cash outright may not be financially sound, especially if you are receiving an enhanced rate of interest due to the amount in your account. The same principle applies in reverse to interest paid when you have a credit card with a very high limit that is sufficient to pay for the project.

If you have neither the savings, nor a high enough credit card limit, then other options could be to take out a home equity loan, where the amount borrowed is secured on your property, or a remortgage of your property, which adds the additional amount to your mortgage payments.

In both cases your financial planner will save you a lot of time, effort, and stress, by assessing all the possibilities and calculating which will make the most financial sense. This will take into account your income and outgoings, the projected cost and time of the project, the added value to your property and any interest which applies to a loan or remortgage.

This work by your financial planner can literally save you thousands of dollars on unnecessary interest and fees, and ensures you can afford the payments. Imagine the peace of mind you will have during the project and the satisfaction, once it is completed, of knowing it is an investment with a higher return than you ‘d otherwise have seen.

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