Affordable Home Design: How To Set A Budget In Five Steps
You may be a first home buyer, you may be upgrading or downgrading, either way, when it is time to design your dream home you cannot go wrong when you set an affordable home design budget before commencing work. In this blog post we outline five simple steps home buyers can take prior to starting the design process that will make the process a whole lot smoother and easier to manage financially. Home design is not cheap, but by planning out your finances before the job begins you ensure you are prepared for the worst-case scenario and that the result meets your expectations.
1. Estimate Home Design Costs
As a rule of thumb, you should spend no more on each room than the value of that room as a percentage of your overall house value. So, get an approximate value of the capital available for home design, then divide the total up so you have the value available for each room according to the floor space you want. Once you have a budget for each room you can begin to design.
Another thing to keep in mind when planning the cost of home design is the return on investment. Kitchen designs tend to offer the lowest ROI for homeowners, at 50c on the dollar. A mid-range bathroom design will offer the highest return on investment of any home feature.
2. Consider Home Loan Financing Options
Many homeowners will not be able to cover the cost of design and construction without receiving some sort of financial assistance. There are several options available on the market to assist with covering the cost of a home renovation.
Refinancing: You might be able to refinance your mortgage at a lower rate with a different provider. The savings on your monthly repayments could become the capital you need to begin designing from scratch (rather than buying a pre-built home).
Mortgage Redraw Facility: Some lenders will allow you to redraw equity you have paid on your existing loan to spend elsewhere. Ask your lender if this is possible with your current home loan.
Personal Loan: Big and small banks alike will facilitate access to personal loans that can assist you in paying for home designs.
3. Get Multiple Quotes From Design Contractors
Be sure to compare quotes from multiple contractors to ensure you are getting the best value possible. Also, when dealing with contractors, be sure to lay out your instructions incredibly clearly to ensure the quote is as precise as possible in terms of what needs to be done. Do not always go for the lowest bid because the workmanship may be shoddy. Instead, use your critical judgement and select a contractor that appears to give the best value for money.
4. Stick to Your Original Designs
It may be tempting during the process of renovation to ask for additional augmentations or features to your home design. This can get expensive quick, so try to stick to your original plan as much as possible when working with designers.
5. Account for Hidden Home Design Costs
Hidden imperfects often mean that home renovations cost more than originally expected. Rather than dig yourself into a hole trying to pay for unexpected last-minute fees, it is best to leave a cushion of 10-20% for unforeseen expenses. It is rare that any home design project goes totally smoothly, and it is best to be prepared for this.
If you are looking to start the process of affordable home design, contact UHomes today for a quick project estimation. We will be able to answer any questions you have before arranging a meeting where we will sit down with you and start to plan the designs of your brand-new home. Call us on 03 9048 5737 Monday to Friday, 9:00-5:00pm to ask any questions and to begin designing your dream home.