Making any structural changes to your home? Before you knock out that wall, you might want to consider applying for a construction loan for your home renovation.
Construction loans work a little differently to regular home loans, as payments from the bank are progressively released to the builder as they complete various stages of the renovation. This helps to monitor the progress of the renovation and means you don’t have to worry about paying the builder directly. You make interest only repayments on your loan until the renovation is finished, which means you could have some extra cash handy during the construction period.
Once the renovation is complete, you can start making repayments on both the principal (loan amount) and interest, or you can continue to pay interest only for a period of up to five years.