If you are a long-time homeowner looking to renovate, a renovation mortgage is a perfect solution for you. Whether you are looking to expand your home, renovate a kitchen, or finish a basement, a home improvement mortgage can help you finance the project.
We highly suggest renovation loans for long-time homeowners since chances are your equity has built up quite high over the years. Combine that with today’s historically low mortgage rates, and you have the perfect opportunity to renovate your home. Renovation mortgages in Canada are a simple way to help homeowners build their dream home. And we can assist!
Transforming an Older Home
A renovation mortgage is not only recommended for long-time homeowners. Many people choose to get a home improvement loan when purchasing an older home and renovating it. This type of loan is commonly known as a purchase plus improvement mortgage. It includes the acquisition cost of the property, in addition to any renovations that could potentially increase the value of the home. The great thing about this loan is that it only requires you to put as little as 5% down.
A Cost-Effective Way to Build Your Dream Home
Building your dream home has never been more comfortable with the help of a renovation loan with a mortgage. Adding a second story, finishing a basement, or completely renovating a room are all costs that you can add to your mortgage, instead of worrying about paying upfront. Spreading out these payments every month is a much better cost-effective strategy that will allow you to enjoy a newly renovated home as soon as possible.
The Renovation Financing Process
The way home improvement loans work is very manageable. For a better understanding, we’ve listed a step-by-step breakdown of the process below.
- Determine the estimated cost of the renovation
- Get the appraisal. Which is essentially the value of your pre-renovated property and the estimated value of your property once renovations are complete.
- Factor in the renovation costs into your mortgage
- Begin and complete the renovation construction
- After completion of the project, the total cost of renovations is determined and then factored into your mortgage.
FAQs About Renovation Financing
Just like any loan, there is an approval process. You will be required to provide proof of the project, and evidence that the funds will be available. Besides that, pretty much anyone looking to renovate their home can get a renovation loan.
It all depends on the scale of the project and your projected income. The larger the project, the larger the loan. Typically, these mortgages will require you to put a minimum of 5% down initially. After completion of the project, the rest of the funds will factor into your monthly mortgage payments.
For the best home renovation mortgage rates in Canada, give Mortgage Residence a call today! We can’t wait to help you get started on renovating your dream home.