Major Renovation (builder? Architect? Civil Engineer?)

[yuansong78 0]

There is also an interesting idea that was presented to us in relation to the financing of the A&A works.

It was said that we could factor the cost of the work via the housing loan that we are currently financing. Since we are going to increase the gross floor area (GFA) and also refurbishing the remaining of the house, the valuation of the house would almost certainly increase given the scale of works to be done. Therefore, we were told that we could do a re-valuation and hence factor this cost into our existing housing loan and hence be able to pay the cost of works via the monthly loan payment.

Has anyone actually done this before? Any comments?

[kardtoon 0]

There is also an interesting idea that was presented to us in relation to the financing of the A&A works.

It was said that we could factor the cost of the work via the housing loan that we are currently financing. Since we are going to increase the gross floor area (GFA) and also refurbishing the remaining of the house, the valuation of the house would almost certainly increase given the scale of works to be done. Therefore, we were told that we could do a re-valuation and hence factor this cost into our existing housing loan and hence be able to pay the cost of works via the monthly loan payment.

Has anyone actually done this before? Any comments?

This is quite a common practice and what many do is that they take some sort of construction loan during the building period and after th building is complete, they would apply for a revaluation and remortgage of the housing loan in order to price in the construction amount. Make sure that your housing loan is not in any lock in period as it could incur penalties if you decide to reprice the mortgage. Talk to your banker and they should be able to advice what to do.

[yuansong78 0]

This is quite a common practice ...

Not sure how construction loan works though. Will go do some research and ask our banker about it as well and see how things turn out. But the idea of not paying a huge lump sum upfront for the construction works is really attractive. Cash is king. No point paying so much in one go.

[kardtoon 0]

Not sure how construction loan works though. Will go do some research and ask our banker about it as well and see how things turn out. But the idea of not paying a huge lump sum upfront for the construction works is really attractive. Cash is king. No point paying so much in one go.

You basically take a construction loan at a pretty high interest rate... last I checked 18 months ago was about 6.7% or thereabouts. Loan is on draw down basis, meaning that interest only charged on amount drawn, which means it's progressive to the construction since you pay your contrator monthly. You can also opt to just pay off the interest and not the principle during the construction period.

Once construction ends, do a revaluation and remortgage and then us can use the high equity to pay off the construction loan, which you will want to due to interest rates difference. However the risk is that the property market crash... then jialat liao.

[gunbound888 0]

<!--quoteo(post=629554:date=Apr 15 2011, 02:31 AM:name=kardtoon)--><div class='quotetop'>QUOTE (kardtoon @ Apr 15 2011, 02:31 AM) <a href="index.php?act=findpost&pid=629554"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->This is quite a common practice ...<!--QuoteEnd--></div><!--QuoteEEnd-->

Not sure how construction loan works though. Will go do some research and ask our banker about it as well and see how things turn out. But the idea of not paying a huge lump sum upfront for the construction works is really attractive. Cash is king. No point paying so much in one go.

Hi yuanson78,

I also just bought an old semi-D with 3500ft2 land but a small build up of about 2800ft2. I am thinking of A&A on the following:

Constructing a new balcony and re-conditioning the roof

Converting the current dry kitchen to a study-room

Re-furbishing the wet kitchen

Internal renovations, new tiles, parquet flooring and electrical etc

As such, will appreciate if you could also recommend me the builders' contact you have found. Thanks in advance!

[yuansong78 0]

I also just bought an old semi-D with 3500ft2 land but a small build up of about 2800ft2...

We have not found our builder yet. We have been meeting prospective builders and architects and talking through our requirements with them. Depending on the scale of A&A that you wish to do, perhaps you should do the same too. From the scale of your work, it might not require a builder after all. Just talk to some builders and they would be most glad to provide you more details and also a quotation if required. Hope this helps.