How to Pay for Home Renovation Costs with a Smart Solution?
Many homeowners dream of making renovations to their homes. They spend hours surfing Pinterest, checking out all the beautiful photos and saving ideas for their own renovation someday.
Wouldn’t you love to upgrade your worn out old carpet to hardwood floors? Would you like to replace your outdated old cabinets with gorgeous new custom cabinets? Do you need some extra space for your growing family that a home addition could provide?
If so, you are not alone. Lots of homeowners dream of home renovations, but they don’t make their dreams a reality because they don’t know how they will pay for them.
How About Home Renovation Costs?
If you intend to wait until you have all of the money in your bank account before you make renovations, you could be waiting a long time. Renovations can be expensive, and it’s hard to save when so many other expenses are popping up and demanding our attention.
Many first-time home buyers purchase a home with great plans to renovate it, but they quickly realize that the purchase left them with insufficient cash on hand to complete their plans.
Fortunately, you don’t have to have all the money you need for the renovation in order to get the job done. There are several financing options available that can make your renovation dreams a reality. Let’s take a look at the options.
If you currently own a home and are planning to make major renovations, mortgage refinancing may be the best option for you. With mortgage refinancing, you can borrow up to 80% of the appraised value of your home, minus your outstanding mortgage balance.
Interest rates are at record lows, and the repayment period is spread over a long time. This means that you can get a big chunk of cash to pay for a major renovation, and it will cost you much less than paying on a credit card or taking out a personal loan. You can even reduce the interest that you are paying on your current mortgage.
Home Equity Loans & Lines of Credit
A home equity loan or line of credit is a great way to access the equity in your home to get funds for a renovation project. You can usually borrow up to 80% of the property value, and you can access the funds any time.
The interest rates are much lower than unsecured financing options, like credit cards and personal loans. You can even make interest-only payments to keep your costs down.
CMHC Mortgage Loan Insurance
If you are planning to purchase a new home and make renovations to it, you can finance those renovations at the time of purchase. Through CMHC’s Purchase Plus Improvements program, you can add your renovation costs to your mortgage. Some conditions may apply.
You only need to put down a 5% down payment for the home purchase and the renovations; funds will be advanced for up to 95% of the home’s value after renovations. Interest rates are quite competitive, and there are no extra fees for premiums for progress advances. There are rebates for energy saving renovations, too.
If your home renovation dreams are nothing more than dreams, talk to the professionals at Mortgage Ladies.
We can turn your dreams into reality by helping you to secure the best financing options for your project. There are plenty of financing options for renovating your home, so call Mortgage Ladies at 905-789-8198 to discuss your options and get started on your renovations today.