How to use the construction loan to add value to your home?
You own more than one house, and in a context where interest rates are lowest on the interbank market, you want to take advantage of it to invest your money. You sometimes think of renting one of your homes or even selling it for a high price. Beforehand, you have to go through the valuation stage for more added value.
The valuation of your property
Valuing your property means renovating it so that you can rent it or give it away at a higher price, as this rental management expert explains. For this, it is customary to finance your renovation project with a work loan, or more specifically a renovation loan. This type of loan has been in high demand in recent years. For information, renovation loan requests increased by 21% in 2015 compared to 2014.
A renovation loan for each type of work
Identify the parts of the dwelling that need to be improved or transformed. Is it the construction of a veranda, the extension of the building, ecological work or a simple touch-up of decoration? This will help you to clearly define which renovation works you will undertake. If you manage to define them, you will know the scope of the interventions and also the work credit that will be appropriate.
In Belgium, there are three types of renovation credit, namely:
- The renovation loan for property owners who want to carry out major work;
- The financing of small works such as the decoration, the equipment or the fitting out of a house; this loan is intended for tenants and owners;
- The green energy loan for owners, dedicated to ecological work, the aim of which is to reduce the energy bill and preserve the environment. You benefit from a premium or a tax advantage by applying for it.
Main advantage of the works loan and need for simulation
What these three grants have in common is the flexibility of the conditions. No warranty or compulsory insurance is required. The amount to borrow varies according to the duration planned for the repayment. It is therefore advisable to simulate in order to be able to settle on the choice of monthly payments. Online simulation is more practical. For each transaction, for each value entered, you will see the relevant APR (annual effective annual rate) appear.
As soon as you are determined on the importance and the type of work to be done, find out about the need for a building permit or a building permit.