Behind the scenes

Bathrooms may be small spaces, but they still require a lot of attention to detail and good planning. And that includes planning finances.

Working through the different options need not be a headache, however. Westpac has taken the hard work out of the process, and can answer questions you might have about funding your project. Westpac also has plenty of useful advice to help you get started.

For example, you need to make the budget realistic. Westpac recommends that you allow for a contingency of 10-15%, and that you stick to it. If you are renovating with the intention to sell your home in the short term, it's worth understanding how much value the project will add to your home to avoid overcapitalising. You need to plan, also, for council approval if you intend to undertake structural work.

Westpac suggests talking to people who have undertaken a similar project. They may be able to tell you about possible pitfalls and recommend tradespeople. It is worth getting at least three quotes and checking previous jobs tradespeople have completed.

Financing your project is another key consideration and it's probably right at the top of your list. Westpac has a range of finance options for different circumstances. If you have a Westpac floating home loan and have paid off more than your minimum repayments effectively building up a buffer between your loan balance and the limit to which you can borrow you could use the redraw feature. This allows you to withdraw the extra money you've paid into your home loan to fund your renovation. If you have a fixed loan, you can redraw the buffer when the fixed term expires.

You could also apply for a top-up to extend the credit limit of your existing loan. If approved, you can top up an existing floating loan account or create a new account for the top up.

If preferred, you can have the top up in a new account that is paid off faster than the rest of your home loan. For example, you may want to pay off your bathroom in five years, but your total loan may have 15 years to run. Westpac can arrange this for you.

Westpac's Choices Everyday loan is another good option when you are undertaking a renovation project, because it works as a line of credit that you draw down as required to pay a contractor or purchase products, for example. This means you don't pay interest on the money until you use it.

The Choices Everyday option links well with a Westpac hotpoints® credit card. You can pay for products and labour using your card and get hotpoints for every dollar you spend, which you can then redeem for a range of rewards. This option also gives you up to 55 days interest free. At the end of this period, you can transfer money from your Westpac Choices Everyday account straight into the credit card account.

And don't forget, any renovations you undertake may increase the value of your home, so you need to ensure you have adequate insurance cover. Westpac can help you review your insurance and increase your cover if necessary. You can save 10% by taking out home and contents insurance at the same time, and unlike most other insurers, you can pay fortnightly or monthly at no extra cost.

For details, visit your local Westpac branch or phone 0800 177 277. Alternatively, visit the website: www.westpac.co.nz.

Story by: Trendsideas