Home Renovation Financing Options
Canadian Mortgages Inc. (CMI) offers a range of financing options to help homeowners obtain the capital they need to finance their renovation project at an affordable rate. If you decide that your home renovation warrants borrowing money, consider the following options for getting your project up and running.
SECURED LINE OF CREDIT: With a secured line of credit, homeowners can access funds at any time and for a variety of purposes. A secured line of credit offers all the advantages of personal lines of credit, but are secured by your property’s equity, which means the loan can be obtained at a much lower interest rate. With CMI, secured lines of credit are available for up to 80% of your home’s value. A secured line of credit is ideal for ongoing or long-term renovation projects that require ongoing access to funds.
SECOND MORTGAGE: A second mortgage is a popular mortgage refinancing option for funding major renovations. Obtaining a second mortgage allows you to spread the repayment over a long period at rates that are normally much lower than credit cards or other personal loans. Through CMI, homeowners can borrow up to 85% of their property’s value through a second mortgage.
DRAW MORTGAGE: Renovation loans can also be obtained in draw fashion, where funds are advanced to the homeowner in intervals as the house is being completed. A draw mortgage enables lending up to and in some cases exceeding 100% of the home’s current value. Risk is mitigated by the lender funding the project in stages, where the loan does not normally exceed 80% of the final anticipated “improved value.” While not always, this type of financing is provided in the form of private mortgages.
Homeowners have many reasons for renovating their property. Whether to save energy, improve living space or increase resale value, renovations can bring a fresh look to an existing property regardless of its age or location. Before you begin, it’s important to learn about the financing options available to meet your home improvement needs. Whether you’re planning a major renovation or a minor touch up, financing is one of the most important steps of any home improvement project.
Common Home Renovation Projects
Increasing the value of a home is the most common motivation for renovating. Below are common renovation projects that have been proven to boost the value of your property over the long term:
- Adding a deck, driveway or fence
- Replacing siding or windows
- Installing attic bedrooms
- Remodelling kitchens and bathrooms
- Finishing or remodelling a basement