Moving into your first home is a truly exhilarating moment, one which puts a pin in months of logistical difficulties and financial anxiety – and one only overshadowed once you close the front door, turn around, and realise the months of logistical difficulty yet to come. In order to be able to afford your first home, you’ve likely gone for a doer-upper – and even if you haven’t, there’s always a small number of DIY must-dos lurking around the corner.
Having just spent more money than you’ve likely ever spent in your life – on a deposit, survey, and all the little legal fees that add up over the course of the house-buying process – you might be looking at a savings pot that’s on the lighter side. In order to make your home renovations a possibility, you’ll need to reckon with some tough financial choices; here, let’s explore them.
A Clear Plan and a Realistic Scope
First and foremost: you need a plan. There’s no fumbling down the back of the sofa for essential renovation money – not in the least because you’ve already seen the back of it while getting it moved over. You need a budget, and in order to have a budget, you need clarity. Clarity on what you want to achieve, what absolutely needs doing, and what would just be “nice to have”.
This is where you start putting a good spreadsheet together. Splitting up your ideal renovation undertakings into the latter two brackets, then calculating the rough costs of each renovation, will give you an illustrative window of what you can expect to need for your next year of renovation work.
Understanding Renovation Costs
Predicting the costs of specific renovation works is a little more difficult than it might first seem, though. Not only are there more potential hidden costs, relating to consultations, planning permissions and more, but you’ve also got to try and price in fluctuating material and labour costs. There are calculators online that can give you the broad strokes, but the closest you’ll get to real values is from getting quotes from contractors – and making sure you’ve got headroom for if costs increase.
Decide How You Will Finance the Project
With even a general idea of the cost of your renovations, you can now think about how best to raise the money. For longer-term and “like-to-have” projects, like decoration and uplifting bedrooms, your best bet is to structure your income such that you’re building a savings pot separate from your emergency fund or other savings.
For more urgent renovations, it may be necessary to explore different funding options. Homeowner loans are a good option for accessing larger sums at lower rates of interest, as you can use your new home as collateral to access them. Of course, this comes with risk of its own, where failure to properly budget for repayments can put your home at risk. This is exactly what planning is for, though – and a much more accessible option than remortgaging so soon into your homeowning journey.