Loan for apartment renovation, is it worth it?
October 5, 2019
Home renovation has always been a fairly well-publicized topic because, although European funding shows that much of the old panel and brick apartment buildings are being renovated in cities, people do not really know if this practice is profitable and whether the long-term cost of renovation is high. will pay off, especially if you need to take out a mortgage to make this renovation.
Where is the heat of the house lost?
Most of the heat for an apartment house is usually lost directly from the walls and windows where at least 60% of the total loss goes , while the roof and ground floor floor lose the remaining 30%, the last 10% remaining from doors, vents and other areas. they are insignificant when compared to the heat that is lost through walls and windows, so when renovating a house it is important to insulate the walls and replace the windows, and then the roof and even better if the heating unit is replaced there is no loss and the bathroom and toilet are the hottest places in the house in the winter because the pipes in this heat unit go through those small spaces.
Credit and its interest?
In order to be able to renovate an apartment house by insulating it, changing various heating routes, and changing windows, the homeowner usually has to take a loan from one of the biggest banks in Latvia and these loans usually last for at least 10 years, but usually take up to 15 years. It is only possible to reduce these monthly loan repayment terms so low that they coincide with the savings that will be gained from this renovation. This is definitely not an MMS credit, and to get a loan you have to go through countless mountains of paperwork before the bank will evaluate whether it is profitable to give the credit. Of course, banks or private lenders also want to earn on these loans, and even though the average interest rates are not disclosed, they are definitely at least 5% to 7%, which means that at least 50% of the total interest payments alone. To qualify for such a loan, the home must meet a variety of conditions, and initially the loan must be for the full amount of the renovation before can cover part of the loan by repaying it to the bank and reducing the monthly loan payments.
Although winter bills are usually estimated to be at least 50% lower in winter than before renovation, not all projects save as much and only 30% bills are reduced and sometimes even lower, but there are also projects where bills are reduced by more than 50%. But as a general rule, as these heating bills go down, the total amount you pay will even out, because you still have to pay the credit and it is not necessarily one of those cheaper joys. After such repairs, it is likely that in the summer you will pay much more in summer than before, but in winter the payment will be about the same, so people will not feel the savings in their wallets and even vice versa they will have to pay more.
How to do this renovation?
Renovations are usually done by one of the big companies offering the cheapest payment and in a competition where virtually anyone can participate. These tenders are announced by the building manager himself, and if more than 51% of the total population is collected in signatures, these signatures and contest results can go to the bank and wait for the creditor to answer, and if yes, renovation can begin.