Top 4 renovation trends for 2015

Top 4 renovation trends for 2015

It is still quite early to be talking about what the big design trends are going to be for 2015.  But if you want to get ahead of the pack, it’s good to know what the trends are now, while it’s still early. This way, if you’re planning on refinancing your home loan in order to fund renovations, you’ll have enough foresight and time to choose the right one. 

Here are some of the big trends that could well take Australian renovations by storm in 2015.

Creating a healthy home

Ensuring the health of everyone living in your property is always at the top of any self-respecting homeowner’s priorities. But traditionally, a healthy lifestyle was ensured through elements like a good diet or regular exercise. 

What people are increasingly cottoning onto is the fact that home design can also play a role in reducing this. A home that’s designed to encourage natural ventilation can get rid of harmful household pollutants like carbon monoxide, lead, or even dust and various volatile organic compounds. The home should be designed to encourage the flow of breezes and convection currents, as well as to limit the encroachment of damp. 

Multigenerational living

There’s no doubt about it – Australians are living longer. For instance, while males and females born in 2001-03 could expect to live to 77.8 and 82.8, respectively, those born in 2010-12 are predicted to live to 79.9 and 84.3 respectively, according to the Australian Bureau of Statistics. 

At the same time, with the world still in recession and everyone’s savings accounts taking more of a hit, younger people are choosing to stay at home longer. It’s therefore not unusual to see households with three generations all living under the same roof.

Homes which acknowledge these developments and incorporate this fact into their design will be hot property in years to come. For instance, you might future-proof your home by converting a living space into a room for sleeping and with bathroom access. 

Sustainability

Sustainability is hardly a new trend. The idea of making sure every facet of our lives is making the least impact possible on the natural environment and the world’s resources has been increasing in importance. But what with climate change agreements being signed left and right, 2015 may well be the year where sustainability in home design really hits its stride. After all, BCI Economics and FuturArc recently reported that green building principles have become accepted as part of mainstream building.

Sustainability in home design doesn’t simply mean ‘upcycling’, or taking previously unwanted items and putting them to new and ingenious uses. It also involves recycling materials for renovations – for instance, if you want to add a new kitchen countertop or wall, why not make use of salvaged brick, or another type of material that would otherwise go in the junk pile?

Metal is in

While some things never go out of style – is a beautiful marble floor ever going to convey anything but utter class and sophistication, for instance? – some things come into vogue a little bit later than others. This is the case when it comes to metal, which is tipped by many to be one of the big renovation trends of this year. 

Metal is a tough, durable and attractive material that is remarkably versatile – anything from taps to shower floors. Materials like copper, steel or even pewter lend a certain earthy atmosphere to a living space. The key is to avoid materials like stainless steel, which tend to have more of a cold, impersonal feel to them. 

Whatever renovation you decide to go for, just remember to work within a budget. You don’t want to overload your credit card solely to keep up with the Joneses.

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How can I get a home loan with bad credit?

If you want to get a home loan with bad credit, you need to convince a lender that your problems are behind you and that you will, indeed, be able to repay a mortgage.

One step you might want to take is to visit a mortgage broker who specialises in bad credit home loans (also known as ‘non-conforming home loans’ or ‘sub-prime home loans’). An experienced broker will know which lenders to approach, and how to plead your case with each of them.

Two points to bear in mind are:

  • Many home loan lenders don’t provide bad credit mortgages
  • Each lender has its own policies, and therefore favours different things

If you’d prefer to directly approach the lender yourself, you’re more likely to find success with smaller non-bank lenders that specialise in bad credit home loans (as opposed to bigger banks that prefer ‘vanilla’ mortgages). That’s because these smaller lenders are more likely to treat you as a unique individual rather than judge you according to a one-size-fits-all policy.

Lenders try to minimise their risk, so if you want to get a home loan with bad credit, you need to do everything you can to convince lenders that you’re safer than your credit history might suggest. If possible, provide paperwork that shows:

  • You have a secure job
  • You have a steady income
  • You’ve been reducing your debts
  • You’ve been increasing your savings

Can I change jobs while I am applying for a home loan?

Whether you’re a new borrower or you’re refinancing your home loan, many lenders require you to be in a permanent job with the same employer for at least 6 months before applying for a home loan. Different lenders have different requirements. 

If your work situation changes for any reason while you’re applying for a mortgage, this could reduce your chances of successfully completing the process. Contacting the lender as soon as you know your employment situation is changing may allow you to work something out. 

Are bad credit home loans dangerous?

Bad credit home loans can be dangerous if the borrower signs up for a loan they’ll struggle to repay. This might occur if the borrower takes out a mortgage at the limit of their financial capacity, especially if they have some combination of a low income, an insecure job and poor savings habits.

Bad credit home loans can also be dangerous if the borrower buys a home in a stagnant or falling market – because if the home has to be sold, they might be left with ‘negative equity’ (where the home is worth less than the mortgage).

That said, bad credit home loans can work out well if the borrower is able to repay the mortgage – for example, if they borrow conservatively, have a decent income, a secure job and good savings habits. Another good sign is if the borrower buys a property in a market that is likely to rise over the long term.

How do I take out a low-deposit home loan?

If you want to take out a low-deposit home loan, it might be a good idea to consult a mortgage broker who can give you professional financial advice and organise the mortgage for you.

Another way to take out a low-deposit home loan is to do your own research with a comparison website like RateCity. Once you’ve identified your preferred mortgage, you can apply through RateCity or go direct to the lender.

Does Australia have no cost refinancing?

No Cost Refinancing is an option available in the US where the lender or broker covers your switching costs, such as appraisal fees and settlement costs. Unfortunately, no cost refinancing isn’t available in Australia.

Can I get a home loan if I am on an employment contract?

Some lenders will allow you to apply for a mortgage if you are a contractor or freelancer. However, many lenders prefer you to be in a permanent, ongoing role, because a more stable income means you’re more likely to keep up with your repayments.

If you’re a contractor, freelancer, or are otherwise self-employed, it may still be possible to apply for a low-doc home loan, as these mortgages require less specific proof of income.

Will I have to pay lenders' mortgage insurance twice if I refinance?

If your deposit was less than 20 per cent of your property’s value when you took out your original loan, you may have paid lenders’ mortgage insurance (LMI) to cover the lender against the risk that you may default on your repayments. 

If you refinance to a new home loan, but still don’t have enough deposit and/or equity to provide 20 per cent security, you’ll need to pay for the lender’s LMI a second time. This could potentially add thousands or tens of thousands of dollars in upfront costs to your mortgage, so it’s important to consider whether the financial benefits of refinancing may be worth these costs.

Is there a limit to how many times I can refinance?

There is no set limit to how many times you are allowed to refinance. Some surveyed RateCity users have refinanced up to three times.

However, if you refinance several times in short succession, it could affect your credit score. Lenders assess your credit score when you apply for new loans, so if you end up with bad credit, you may not be able to refinance if and when you really need to.

Before refinancing multiple times, consider getting a copy of your credit report and ensure your credit history is in good shape for future refinances.

I have a poor credit rating. Am I still able to get a mortgage?

Some lenders still allow you to apply for a home loan if you have impaired credit. However, you may pay a slightly higher interest rate and/or higher fees. This is to help offset the higher risk that you may default on your repayments.

I can't pick a loan. Should I apply to multiple lenders?

Applying for home loans with multiple lenders at once can affect your credit history, as multiple loan applications in short succession can make you look like a risky borrower. Comparing home loans from different lenders, assessing their features and benefits, and making one application to a preferred lender may help to improve your chances of success

Will I be paying two mortgages at once when I refinance?

No, given the way the loan and title transfer works, you will not have to pay two mortgages at the one time. You will make your last monthly repayment on loan number one and then the following month you will start paying off loan number two.

If I don't like my new lender after I refinance, can I go back to my previous lender?

If you wish to return to your previous lender after refinancing, you will have to go through the refinancing process again and pay a second set of discharge and upfront fees. 

Therefore, before you refinance, it’s important to weigh up the new prospective lender against your current lender in a number of areas, including fees, flexibility, customer service and interest rate.

Can I refinance if I have other products bundled with my home loan?

If your home loan was part of a package deal that included access to credit cards, transaction accounts or term deposits from the same lender, switching all of these over to a new lender can seem daunting. However, some lenders offer to manage part of this process for you as an incentive to refinance with them – contact your lender to learn more about what they offer.

How do I know if I have to pay LMI?

Each lender has its own policies, but as a general rule you will have to pay lender’s mortgage insurance (LMI) if your loan-to-value ratio (LVR) exceeds 80 per cent. This applies whether you’re taking out a new home loan or you’re refinancing.

If you’re looking to buy a property, you can use this LMI calculator to work out how much you’re likely to be charged in LMI.