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Home Renovations

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.

Before You Start

Before you start your home renovation project, ask the following questions:

  • Will the renovations increase the value of my home, and does the added value outweigh the costs?
  • How much money will the renovation need?
  • After renovating, do I plan to sell my home or continue living in it?
  • Is renovation necessary or is selling a better option?
  • Will I be able to pay off the new mortgage within five years?

Answering these questions can help you gain clarity about your motivations for renovating and whether this option makes sense for you.

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

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.

CMI Offers Expertise in Home Renovation Loans

Whether you intend to fund your renovation through a secured line of credit, second mortgage or some other means, you should talk to a mortgage broker about your options. CMI works with over 250 lenders from across Canada, allowing you to tap into the best rates and financing options in the industry. CMI’s agents go beyond the top five banks to offer you the best financing options at a rate you can afford.

Before offering you a solution, a trusted CMI broker will assess the cost of your renovation, determine whether you need money upfront and figure out how much time you need to repay your loan. This includes an assessment of cost overruns and the impact of the renovation on your home’s total appraised value.

CMI will also show you how to set aside a portion of your renovation loan to cover items not included in your home improvement contract or initial cost estimate. This will ensure you have enough capital to fund upgrades, new furniture or energy-efficient windows and appliances.

With interest rates at rock bottom, renovation loans are in high demand. Whether you’re working with a contractor or doing the work yourself, CMI can help you navigate the home improvement process from start to finish.

To begin your free consultation, fill out the form below or call us today at 1-877-385-6990.