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Room to move

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Before remodelling this transitional Herne Bay villa, the owners talked to Westpac about the best way to fund their project

Room to move

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To renovate or move? It's a question many families face when they outgrow a house. For the owners of this home, Ian and Suzie Marsden, both options were investigated before they decided it would make more sense to stay put and renovate.

"Because we both love to entertain – Ian is a passionate cook – we wanted a house with a large kitchen," says Suzie Marsden. "But despite looking for quite a while, we couldn't find such a property. So we chose instead to enlarge our existing house, which is in a good location.

"The project not only involved a new kitchen, but also a new master suite and family bathroom. Effectively, the entire house was gutted and we took the opportunity to fully insulate the entire house. We also put in a new pool at the back."

Before the couple embarked on the project, however, they discussed funding options with Westpac.

"First, we wanted to know if we could afford to do it," says Suzie Marsden. "We were assured that we could indeed carry out such a project. Then we talked about how to structure the loan."

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The Marsdens were advised to use a line of credit to fund their renovation. They anticipated the project would take six months and didn't know exactly how much they would need, as plans were being finalised by architect Greg Jones.

"That way, we only paid interest on the money as we used it. Westpac also gave us the flexibility to add more when we increased the budget.

"Once the project was finished, the bank suggested a combination of fixed rate and floating rate home loans would be best for us. We wanted to repay the loan as fast as possible – we have set a date by which we want to be mortgage free. But we also wanted to get the benefit of the best rates. The mix of fixed and floating rates means we can repay lump sums without penalty, which suits us."

Suzie Marsden says the pair took a sustainable design approach to the project, with the aim of saving energy costs on an ongoing basis, as well as helping protect the environment.

"We now have a warmer, quieter and more healthy home, and are thrilled with the way everything worked out," she says. "We were also very pleased with all the help we received from Westpac, which made it all possible."

Westpac offers a number of options for funding renovation projects. If you have an existing home loan, you could apply for a top-up to extend the credit limit. 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 renovation in five years, but your total loan may have 15 years to run. Westpac can arrange this.

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. 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. Or visit the website:www.westpac.co.nz .

First published date: 15 May 2011

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