3 Ways to finance a renovation
We can offer 3 different options to offer you to finance a home renovation.
1. Purchase Plus Improvements
When you purchase a home the lender will loan you the 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. Then it will be released to the client when the work is complete. 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 up to 80% of the appraised home value. The cash is pulled out of your home, your mortgage is increased and then you are able to take advantage of low mortgage rates. This is often a much cheaper option that obtaining a HELOC 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 might want in the future it is important to ensure you are considering this when choosing a mortgage.
If any of these options seem appealing to you please contact us and we can run through which options are available to you and the amounts that you are able to access.