Thinking about renovation ?
Thinking about renovation ?
Ready to make your renovation dreams come true?
Many homeowners are waiting to pay off their mortgages before pursuing home renovations. Home renovations not only make your living area more comfortable but can also make your home more valuable, so they should be considered at the very beginning when purchasing a home.
One smart tactic that several homeowners are using is renovation financing or financing your renovations within your mortgage. This allows you to pay off both your mortgage and the cost of renovations on a monthly basis. It is highly recommended to get an appraisal of your home before and after renovations.
Home renovations are only going to make you money if the renovation elevates the buyer’s heart rate and interest. Eliciting a ‘Wow, that is a beautiful kitchen or bathroom from buyers will only get you one step closer to making them purchase your home at a higher value. Choosing the right design style is also important. Styles can come and go, but there are a few that have stood the test of time. Ask your contractor to learn more about what design styles are trending and what design styles work for most people.
There are several specific details to consider when considering a renovation financing mortgage in Canada:
- Purpose of the renovation: It is important to have a clear idea of what you want to accomplish with your renovation, as this will help you determine the scope of the project and the amount of financing you will need.
- Budget: It is important to have a realistic budget in place for your renovation, as this will help you determine how much financing you will need and whether you can afford the monthly mortgage payments.
- Type of renovation: Some types of renovations, such as those that involve structural changes or add significant value to the property, may be more attractive to some lenders than others.
- Appraisal: Your lender will likely require an appraisal of the property to determine its value and ensure that the renovation is feasible. A renovation financing mortgage option differs from a regular refinance in that it is specifically designed to fund a renovation project.
How does a renovation mortgage differ from a regular refinance?
With a regular refinance, the borrower is simply refinancing their existing mortgage to obtain a lower interest rate or different terms. With a renovation financing mortgage, the borrower is taking out a new mortgage specifically to fund a renovation project. In summary, it is important to carefully consider the purpose of the renovation, budget, lender requirements, type of renovation, and appraisal when considering a renovation financing mortgage in Canada.
Before you decide if a home renovation is right for you, ask yourself these questions:
- Did I have quotes from a licensed contractor?
- Do I have permission from the city, municipality and or strata council for the work to be completed?
- Will the home renovation increase the value of my home?
- Will the home renovations improve life at home for me and my family?
If you answered ‘yes’ to all three questions, then applying for renovation financing may be right for you.
The Mortgage Professionals understand that purchasing and renovating your home can be complex and costly. We’ll streamline the process for you. We look forward to helping you finance your renovations.
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