The best property investment in Singapore is a pre-owned house, condominium, or HDB flat. They’re cost-effective, and the Singapore government provides its citizens full support when it comes to financing.
However, despite their support, you’ll need to use a renovation loan Singapore lenders can provide for optimal improvements.
A Singapore renovation loan is necessary because of the enormous expenses Singaporean homebuyers can incur due to the property’s natural wear and tear.
For example, a 3-room HDB flat will take about S $30,000 – S $50,000 to restore full functionality. On the other hand, a 4-room renovation will cost about S $40,000 – S $50,000. A 5-room flat will reach about S $110,000 as a minimum.
If you think it’s still unnecessary to use a home renovation loan DBS or other lenders provide, here are a few more details to help shed light on the subject.
Home Renovation in Singapore: Determining Your Total Renovation Loan Expenses
• Residence Style
HDB flats are convenient because they’re relatively inexpensive than their commercial counterparts. However, these can come in 3-5 room flats, which have prices proportionate to the number of rooms and amenities they have.
Renovating a 3-room HDB flat will be about 30% more affordable than a 5-room flat. Even renovating a pre-owned 5-room HDB flats will still cost more than newly-made 3-room flats.
• Current and Long-Term Condition
Pre-owned HDB flats and condominiums come in a variety of conditions upon your purchase. An appraiser gives the most accurate estimate regarding an HDB flat’s value, indicating its actual value and renovation cost clearly.
During your visit, make sure to take note of some problems you’ve seen in the property. Doing this helps you note down the additional renovation and level your property needs to function once you move in.
• Renovation Needed or Wanted
Truthfully, HDB will sell nearly-dilapidated HDB flats at the most affordable price possible to attract buyers. Unfortunately, the renovation cost you’ll undertake might take more than the renovation loan you can borrow from lenders.
Your renovation costs will depend significantly on the repairs and restorations the property needs to function. If you want additional flat embellishments or aesthetic improvements, you’ll drive up your renovation costs too.
• Construction Materials
About 50% of your total renovate loan costs will cover the materials you’ll need to restore the property to its full functionality and usability. Each material varies in cost and durability.
Additionally, these two factors aren’t mutually exclusive. For example, stylish granite countertops are expensive, but they can last the same number of years as typical granite countertops. Architectural floor tiles make your HDB flat in vogue, but it’s going to cost a pretty penny.
• Contractor Expertise
The HDB can recommend contractors who maintain and have worked on numerous properties in your local community. In most cases, these are the most affordable ones if you compare their costs with premium contractors.
For example, if you plan to use an interior designer and their accompanying and trusted contractor, it’s going to cost much more than the HDB-recommended contractor. Consequently, this will drive up your renovation costs.
Why Use a Home Renovation Loan?
Let’s face it: with the high expenses Singaporeans regularly incur, coming up with a tremendous amount of cash will take time and conscious effort.
However, with a renovation loan, you have an enormous cash amount to get your renovation plans started immediately.
Truthfully, borrowers will deal with some interest rates and take note of their repayment period, which often extends to 3 years or 5 years of payment plans.
However, a renovation financing service relieves their monthly income, allowing them to create a manageable and practical budget.
Renovation loans help with the following processes:
• Wall Painting, Flooring, and Tiling Costs
Painting, flooring, and tiling costs will take about S $1,000 on average for all three. However, if you plan to use architectural materials, it can go up to S $2,000.
On the other hand, most new homeowners won’t spend much on renovating the tiles, especially if they’re not detrimental to the residential property’s overall structural integrity.
• Overhauling Electrical Lines
All your appliances, smartphones, and other electricals at home will need proper electric lines. Unfortunately, aging lines are a tremendous fire risk. If one of your modern appliances overloads one circuit, it can cause a circuit’s vulnerability and cause massive damages.
Your electrical expenses are in proportion to your property’s size. For example, a 3-room electrical overhaul will be less expensive than a 5-room electrical overhaul. Truthfully, electrical line repairs are one of the most essential renovations properties need.
• Improving Plumbing and Bathroom Facilities
Next to electricals are your plumbing and bathroom conditions. If these are in a dire state after you’ve started paying for the property, you’ll really want to use a renovation loan with a low-interest rate to finance your possibly massive repairs.
Plumbing leads water with consistent pressure throughout your new HDB flat.
Additionally, your bathroom and kitchen will use up the most amount of water for your flat. In this light, it’s undeniably necessary to invest in your plumbing, electricals, and bathroom before anything else.
• Kitchen Improvements
For many homeowners, kitchens aren’t much of a priority unless they’re using it often. Young Singaporeans are abandoning kitchen repairs in favor of take-outs.
However, if you want a decent and aesthetically-pleasing kitchen, you’ll want to invest a bit in the right countertops and cabinets. If you’re a heavy kitchen user, then you’ll want to modify the kitchen to accommodate additional appliances and amenities.
Consequently, you’ll take in more expenses than just overhauling your countertops and cabinets.
• Structural Integrity Checks and Improvements
If you’ve purchased your HDB property in a detrimental state for a lower price, you’ll want to have professional contractors to inspect the property’s overall integrity. The small crack you’re seeing under the roof might have a leak capable of causing massive water damages.
Inspectors can tell you whether your flooring might have pests living underneath or the wooden shelves, posts, and molds require an update because of the former HDB flat owner’s neglect.
How to Find the Perfect Renovation Loan
Truthfully, personal loans can provide you enough financing for a perfect home renovation. On the other hand, a single search engine query leaves you at the mercy of numerous personal loan and renovation loan offers.
You can narrow down your list by finding a suitable lender, bank or alternatives, to provide you with a loan amount your contractor recommends. Next, make sure they fulfill all the characteristics we’ve listed below, which guarantee you’ll have the smoothest repayment experience possible.
• Low Interest Rates
A renovation for your home loan has lower interest rates if you compare it to a bank loan’s interest rate.
For example, DBS’ Renovation Loan Package will only give you an effective interest rate of 5%. If you compare this interest rate with an enormous bank personal loan, you might see a high interest, even if you’re borrowing the same loan amount.
Truthfully, you can consider any renovation loan the best renovation loan because it is up to the task of improving your living quarters.
• Total Amount You Can Borrow
The total loan amount you can borrow depends on the property you have. For example, a 3-room HDB flat will have a lower loan amount than a 5-room HDB flat. On the other hand, you won’t need to borrow high renovation amounts if your 3 or 5-room HDB flat isn’t detrimentally damaged — unless you plan to change its cosmetics.
Unlike personal loans, the loan amount depends on the renovation’s needs, which puts your renovation contractor’s suggestions in the spotlight.
Be aware of any processing, disbursement, and late payment fees your renovation for a home loan might have. Renovation loans can have higher final loan amount totals because of these late fees that accumulate interest.
• The Lender’s Reputation
Banks and financial institutions follow the rules and regulations of governments and regulators. If you follow their terms and conditions to the dot, you won’t have any problems using their services.
On the other hand, unregistered moneylenders and unscrupulous parties take advantage of many Singaporean’s financial needs. Make sure that you’re working with a dependable financial institution for renovation loans.
Making It Easy to Find Excellent Home Renovation Loans in Singapore
Loan Advisor, Instant Loan, and other loan comparison sites and search engines make it easy to compare renovation loans. Additionally, they conveniently redirect you to the lenders’ websites and contact details, making it easy to get started on getting your financing.
Google and other search engines display snippets of information about lenders. Once you find a prospective lender, you can instantly see the Google reviews other users and borrowers have left. Often, these are efficient indicators of the lender’s trustworthiness.
If you intend to work with a moneylender, make sure to check the Ministry of Law’s Registry of Moneylenders. Doing so guarantees you’ll work with a licensed moneylender who will work with you towards your financing’s success.
If you have yet to find a reliable moneylender, you can always count on Fortune Credit’s personal loan service, which you can use for your extensive home renovation.