3 Ways to finance a renovation

Written by: Denise Laframboise

We can offer three different options to finance a home renovation.

  1. Purchase Plus Improvements

    When you purchase a home, the lender will loan you extra money to fund a renovation that improves the value of your home. The lender will require quotes and often a second appraisal to confirm that the renovations will improve the equity in the home. The extra money will come out of your mortgage, and be held in trust until the renovation is completed. Once the renovation is finished, it will be released to the client. Clients will have to qualify for the total mortgage amount including the renovation money.
     

  2. Refinance Your Home

    You are able to access equity in your home, of up to 80% of the appraised value. The cash is pulled out of your home, your mortgage is increased and you are able to take advantage of low mortgage rates. This is often a much cheaper option that obtaining a line of credit, and easier to repay as the interest rate is lower.
     

  3. Home Equity Line of Credit (HELOC)

    This option is essentially a second mortgage. It is a line of credit (LOC) that is secured to your home, to allow you to borrow funds at a lower interest rate than typical of an unsecured line of credit. Some lenders will not allow a HELOC behind their mortgage, so if this is an option you may want to exercise in the future, it is important to consider this when choosing a mortgage lender.

If any of these options seem appealing to you, please contact us and we can run through which situation is right for you.

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