Guiding consumers since 2009

Are you ready for a house upgrade?

By Athenkosi Sawutana

You moved into your home knowing one day you would need to make some changes to turn it into your dream home - add a new bedroom, a second bathroom, build a double storey or even move out.

JustMoney put together these signs to tell if your finances allow you to turn these dreams into reality:

Tip: Want to renovate your house? Get a personal loan quote here.

Your credit score is intact

Your credit score is a reflection of your finances. It’s a manifestation of your behaviour towards your debt. If you haven’t missed payments or don’t have any judgements against you, your credit score should look good.

However, if your credit score has dropped, you won’t qualify for a new loan, be it a personal or home loan. Before you embark on that upgrade, work on your credit score. Request a credit report from any credit bureau to see how you’re faring.

Your debt doesn’t exceed your income

If most of your income is already going towards servicing your debt, it’s a clear sign that you should sit back and think about what you want to do. Your debt-to-income ratio should never reach over 41%. Should anything like that happen, you should review your budget before you become overwhelmed.

To calculate your debt-to-income ratio, divide your debt by your income and multiply the answer by 100. If it’s close to 40%, then think about how you’re going to reduce your debt rather than upgrade your house. 

There’s money in your savings account

It’s always good to have a down payment when you’re applying for a home loan. This helps you get a better loan offer such as lower interest rates and a shorter term.

Before embarking on the upgrade you must save enough money to not only help you lower your loan cost, but to ensure that you can pay for the repairs and refurbishments.

You can afford extra expenses

A house upgrade will come with a higher expenditure on insurance, and rates and taxes. You must be prepared to pay more insurance premiums.

The more items you add on your home contents insurance, the more you pay on premiums. If you’re moving into a new area, you might want to look at how that’s going to affect your insurance and your utility bill.

READ MORE: Property Stokvel - the key to owning a house.

If you’re looking to upgrade your house, Tanya Haffern, a wealth coach, has the following tips for you:

  • Make sure your home loan has an access bond facility which will allow you to pay more into it every month and then at a later stage, withdraw the surplus funds.  Take a long hard look at your budget - where can you save money? Monthly subscriptions can be a money drain -  do you really use Apple music that often? 
  • Cut back on all nonessential short-term spending, reminding yourself of your long-term goal every time you feel tempted to splurge.
  • Put all your monthly savings into your bond account which has the added benefit of shortening your payment period which in turn, saves you interest. Of course, you will access these funds to do the upgrade at a later stage, but while you’re saving towards that goal, you will reap the rewards.
  • Design a crystal-clear plan of the changes you’d like to make to your home.
  • Get quotes from the relevant people to understand exactly what costs are involved. You might need an architect, a builder or perhaps just a handyman.
  • Ideally, you want to save enough money to be able to pay for the renovation without having to take out a loan. Using the steps outlined above you’ll be able to save the money, or at least a significant portion thereof, in order to upgrade your home.

When you have the money, that’s the sign that you’re financially ready to upgrade your home, says  Haffern.

Make sure your new home is covered. Fill in this form to get a home insurance quote.

Recent Articles

Featured Lock down your finances

There are quite a few things that may influence your personal finances. These include an economic recession, losing your job, not receiving your full salary, your company closing, or even a state of disaster in your country, such as the current lockdown due to the Covid 19-outbreak. 

Ensure your family doesn’t feel the impact of your retrenchment

Retrenchment doesn’t only change the way you view yourself; it also alters the relationship between you and your family. Things can go from good to bad within a short space of time. But you can do something to prevent your family from feeling the impact of retrenchment.

Someone got injured on my property – now what?

Life is unpredictable and no matter how careful we are, accidents happen. But what if someone has an accident while visiting your house? Your guest could fall off the stairs, slip on the floor or get bitten by your dog. 

How income protection can help you when you’re sick

Your greatest asset is probably your ability to earn an income, which provides a certain lifestyle and the capacity to take care of your dependants. That’s why it’s so important to protect your income against unforeseen illness or injury and to provide for your dependents after your death.


Free large chips at KFC

Price: R119.80
When: Daily
Where: Online

Big family feast for R299 at Panarottis

Price: R299
When: Thursdays
Where: Nationwide

Spur Burger Combo for R249

Price: R249
When: Daily
Where: Nationwide

Latest Guide

Guide to debt rehabilitation solutions