How to Finance your Renovations
Everyday, as I drive the highway, I notice that over 90% of the vehicles on the road are 10 years or newer. That makes me wonder if all of these people own their vehicle or is the vehicle leased or financed?
The auto industry has made financing a vehicle that costs between $20,000 to $50,000 accessible and affordable. Many of us take on this expensive monthly payment for an ‘investment’ that does not count as an asset or, maybe we should say, a reliable asset.
If it is that easy to finance a car, some may wonder if it can be the same to finance a renovation project for their home.
The truth is financing a renovation project for a house or condo is not as difficult or out of reach as it may seem. A bank provides financing to purchase or lease a vehicle and then uses the vehicle as the collateral. The same would apply when someone needs to renovate his/her house or condo.
However, in the case of renovations, the banks use the value of your house in the current market as collateral and will offer homeowners anywhere from 60% to 75% of the value of the house or condo to set up a mortgage on your house.
Since most of the properties in Lower Mainland and Fraser Valley have gained value within last decade, the chances of any property owner having enough un-used collateral that can be liquidated to finance a renovation is very high.
Having this option to finance your renovations, there is no need suffer and continue to live in a run-downed house or condo that could have moldy walls. You can update that old kitchen and the bathrooms. Talk to us and let us put you in touch with the right people to make the transition to a much nicer looking living space. If you deserve to drive a nice car, then don’t you deserve to live in nice looking house/condo as well?
There are a number of financing options to consider when it comes to paying for your home renovations. The CHMC (Canadian Housing and Mortgage Corporation) has a list that includes:
Savings or Credit Card
Personal Line of Credit
Secured Line of Credit
Home Equity Loan
Financing upon Home Purchase
Grant and Rebate options for Energy Efficiency
At Myhomedesigner.com Ltd., we can help design your dream home, provide the blue prints and get an accurate estimate, from one or two professional contractors, that can be presented to the bank or private lender. This will give them a better picture of where and how the money will be spent as well as how the property owner can pay back the loan.
It is important to have a good understanding of how much the renovations will cost and if you are prepared to go over budget, by how much. What is your cut off number? This is where all the research and ‘home’ work really pays off.
When it is time to speak with a financial institution or talk to a Mortgage Broker to assess your financing needs and to see what options are available to you, we will help you do the research, get the quotes, and have the plans in hand.
We are here to help you live your dreams.
One stop shop for your renovation project