Before deciding on a renovation project, it's important to remember that once your aesthetic or cosmetic changes become structural, your loan structure may need to change.

There often comes a tipping point when the renovation planning starts small but it can soon turn into a way bigger project – with structural changes, new rooms, a new story added.

Be cautious – once your aesthetic or cosmetic changes become structural changes your loan structure may need to change.

Indeed any borrowings that you require for major structural renovations will actually need to be done as a construction loan (assuming the home you are renovating is the security property). There often comes a tipping point when the renovation planning starts small (perhaps we are talking about a simple kitchen and a bathroom upgrade) but it can soon turn into a way bigger project – with structural changes, new rooms, a new story added. Be cautious – once your aesthetic or cosmetic changes become structural changes – then any borrowing that you require for the renovations will need to be done as a construction loan (assuming the home you are renovating is the security property).

So why is this? Well – the reason is because your home is what your lender is using as security for the loan. Now – the last thing the lender wants is a home that is half renovated if you run out of money – because – that sort of property is very difficult for anybody, including a lender, to sell. So the construction loan protects the lender (and also you) from the situation where there are not enough funds to complete the construction.