Thinking of renovating your home but you are lacking the funds to support your major makeover. Are you looking for a home renovation mortgage? Here are some amazing home renovation to help you turn your dream home to reality.
Home Equity Loan
This is the most common loan that you can get for your home renovation. You won’t be able to borrow the actual value of your home with this kind of loan. However, without mortgage insurance, you can usually borrow up to 80% of its value if you own it outright. The possible problem with this is that the cost of your renovation plan may be bigger than the equity you have available.
Construction Loan
This is also comparable to a home equity loan, except the lender will take into account the final value of your home after the renovation. You won’t be able to get the full loan value upfront. The loan amount will be disbursed via installments according to the renovation plan.
Line of credit
This is ideal for long-term renovation plans. You can set up a revolving credit line that you can access whenever you want up to your approved limit. You are only charged interest on the funds you use. You can re-borrow the unused funds without reapplying as you pay off your balance. However, in terms of serviceability, the application must be taken not to get in over your head. Ensure that you can make repayments on the line of credit that will reduce the principal amount.
Homeowner mortgage
This might be the best option for you if you’re planning to undergo a significant makeover for your home. It is possible to borrow up to 90% of the value of your home and take advantage of mortgage rates, which are often lower than credit card and personal loan rates.
Personal loans
Personal loans are usually capped at around $30,000. This might be suitable if you’re only doing minor renovations. However, interest rates on personal loans are higher compared to other loans since they are unsecured loans.
Credit cards
This option is only for miniature renovation projects. The interest rates are usually much higher compared to any other mortgages. However, for a very small project, that higher interest might actually be less than loan establishment fees.
Contact us if you’re looking for a renovation mortgage and we’ll help you with the available options as per your credit profile. Speaking to a certified mortgage broker who specializes in renovation mortgages will help clear up any concerns you may have. Let us help you explore all of the options available based on your credit score.