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Mortgage loan for renovation or extension of the home: what are the costs - Infobae
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Crédito hipotecario para refacción o ampliación de la vivienda: cuáles son los costos
Se abren oportunidades únicas para los propietarios. Expertos comparten recomendaciones esenciales y analizan los costos involucrados para maximizar el beneficio de estas facilidades. Descubre cómo pueden transformar tu vivienda
www.infobae.com
May 15, 2024
Unique opportunities open up for owners. Experts share essential recommendations and analyze the costs involved to maximize the benefit. Discover how the property can be transformed
By Jose Luis Cieri
After the return of mortgage loans, several interested parties are thinking about expanding or renovating their home, what are the costs and advice to take into account
The new mortgage loans aim to satisfy a crucial need in the real estate market, allowing citizens to access financing for the acquisition, expansion or renovation of homes. These loans stand out for offering terms and installments that generally do not exceed 25% of the applicant's income, with rates that are close to international standards, fluctuating between 4% and 8%.
The new lines offered by 12 public and private banks, in addition to including the purchase of your own home (in some banks loans are up to $250,000,000 and in others there is no limit), are intended for the expansion and renovation of homes, with a maximum amount available of $125,000,000 (for example in the Hipotecario , others propose more money, the City and Supervielle have another plan).
The Nation plans to deliver 40,000 plans per year and Santander was also launched (from this entity they explained that for every $10,000,000 granted in loans for a maximum term of 240 months, the pure initial payment will be $76,038 for the purchase of a permanent home).
However, the uncertainty regarding the update by UVA and its dependence on future inflation is a factor to take into account.
In addition, the need for policy adjustments to include properties under construction or recently completed, currently excluded by deed requirements that take years, is noted.
To choose the credit term, it is crucial to consider personal financial stability, since shorter terms imply higher monthly payments but a lower total interest cost, while long terms offer more affordable installments at the cost of a higher cost per loan. interests over time.
Pablo Gaytan , from Corralón Ciudadela, mentioned to Infobae that these loans represent an ideal opportunity for young couples with stable income and prior savings, especially for expansion or renovation works focused on key areas such as kitchens and bathrooms.
Given the rise in material prices, he recommended “requesting an amount that includes an additional margin to cover possible inflationary increases, also considering the costs of equipment and completion of new constructions.”
The new proposals allow the home to be expanded and built, for example, towards the background or aerial part of the existing building.
There are also people and families who are registering with various banks looking to add a new environment or build upwards if they have air space or expand towards the bottom of an existing building.
Costs
It is estimated that the cost per square meter to renovate environments such as the living room or bedroom is approximately USD 400, while for bathrooms and kitchens the average amounts to USD 600. For building or expansion projects, the average cost reaches USD 1,200 per square meter. m2, which represents a year-on-year increase of close to 290% in peso terms.
Another option in addition to adding rooms is to tear down walls and unify rooms to move towards the open concept of the home.
Anabela Santos , from INARCH, highlighted that, although traditional construction remains the predominant option due to its durability and general acceptance, dry construction offers significant advantages in terms of speed, cleanliness and insulation, being particularly suitable for vertical extensions given its lower load on existing structures. "The choice between the two will depend on factors such as budget, available time and personal preferences, emphasizing the importance of a qualified workforce to obtain the best results."
It is important to consider that, after building a new environment, it will be necessary to furnish and decorate it with elements such as furniture, curtains, appliances and lighting fixtures.
Gaytan clarified: “The cost of these materials in dollars is not expected to increase more than 5% until the end of the year. Therefore, when requesting a loan, I would advise including both construction costs and equipment and decoration costs.”
No strong increases in materials are expected between now and the end of the year, although everything is subject to how the economic direction and inflation perform.
The new lines of mortgage credit available represent an ideal opportunity for those interested in expanding or modernizing their homes, acting as catalysts for the real estate market and offering a valuable tool for the growth or improvement of homes. Those who make improvements or expansions to their property can experience an average increase of up to 20% in the listed value of the property.
“Banco Nación, among other entities, is including anti-inflation clauses in its credit contracts, as a measure to mitigate the impact in the event of a significant increase in inflation. Although the exact implementation of these measures is still being defined, they are in the process of development,” Santos explained.
Most requested materials and current prices
The most in-demand materials for home renovation or expansion vary depending on the stage of the project.Gaytan explained that, when applying for mortgage loans, homeowners usually purchase rough construction materials first, followed by taps, toilets and finally finishing elements, such as ceramics and porcelain tiles. This is due to the intention to complete significant purchases by taking advantage of financing.
Today the bag of sand is worth $30,000 (a cubic meter, which is approximately 1,400 kilos); a 50-kilogram bag of cement starts at $9,800; The square meter of ceramic floor ranges from $9,000, and a set of (economical) faucets for a complete bathroom ranges from 490,000 pesos.
Taps for bathrooms and kitchens would be part of the most in-demand finishing materials when renovating or expanding homes.
As for the decision between traditional or dry construction, Gaytan noted that there are advantages to both methods, although “I recommend traditional construction, especially for exterior walls, due to its durability and strength. For interiors, the dry option can offer time savings, although not necessarily in costs, it being important to have specialized labor.”
More tips
When choosing the term for a mortgage loan, specialists emphasize the importance of analyzing both the payment capacity and the financial stability of the applicant. Opting for shorter terms, such as 10 or 15 years, may result in higher payments, but reduces your overall interest cost.
Specialists estimate that young couples will mostly opt for expanding or renovating their home or building in areas that their parents or relatives give up.
On the other hand, extending the credit to 20 years or more reduces the amount of monthly payments, although it increases the interest paid over time. Careful selection of the term will ensure that the credit is optimally adjusted to the applicant's possibilities and needs.
Santos also highlighted that when faced with the constant increase in the price of construction materials, it is prudent to request a credit amount that exceeds the initial calculation to face possible increases.
“If an investment of $15,000,000 is estimated for a spare part, consider requesting around $18,000,000 to ensure a margin that covers inflation. This strategy also allows us to proactively purchase everything necessary for the work, avoiding delays once the financing is received,” he concluded.
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