Home Renovation Mortgage
If it’s your first time buying a home and you know the house you like needs renovation, make sure to add renovation costs to mortgage Canada. It is to ensure that you won’t have troubles with your finances in the future. And you’ll get to start your home renovation as soon as you have the key to your new home. You will also pay lower interest rates for a home renovation mortgage than credit cards or loans.
Renovating a home will take a lot of effort and time, and at the same time, it is a costly undertaking. That is why there are various home renovation financing options that you can choose from. Let me give you a list of benefits of a home renovation mortgage.
- Cost-effective- unlike credit cards that go 18% annually on the interest rate, a home renovation loan has a lower interest rate. Meaning you are producing good results without costing a lot of money.
- Helps boost your ROI- besides getting a lower interest rate, you can also have tax rebates for qualifying home renovation mortgages. This means a deduction on your expenses which will boost your ROI.
- Flexible- a line of credit is the best for you if you want flexibility in your loan. It will not give you a fixed amount of loan; instead, it will provide you with a credit limit. This means you can borrow as much money as you want within your credit limit.
Home renovation mortgage options:
- HELOC or Home Equity Line of Credit is also based on home equity but has a credit limit.
- Home Equity Loan- secured loan for a fixed amount of money.
- Personal Loan- best for those who need to pay for renovation expenses but don’t have enough equity to get a secured loan.
- Credit cards- have the highest interest rate. Can get up to 18% interest rate annually.
- Mortgage Refinance- replacing your current mortgage with a new one with a higher mortgage balance.
Boost your Return on Investment (ROI) using a Home renovation mortgage
To have a more significant ROI is one of the goals we want to achieve when we do home renovation before selling our home. That is why all your renovation decisions will determine how much your return on investment or ROI will be.
These points in your house may need improvements to ensure a higher return on investment.
Paint
- paint is the most underrated factor in home improvement. It instills freshness and can flatter your home in ways you’ve never imagined. Before you start painting your home, you might consider getting professional help. Painting may sound simple, but it is more complicated than you think. There are things you will consider first, like the correct palette, skimming the walls, repairing minor damages and the paint’s quality (which will depend on what kind of wall you have)
Fresh paint will most likely garner 60% ROI.
Kitchen
- kitchen has the most significant return on investment when renovated well. It can garner up to 75% to 100% ROI. Quick counter-top refreshes and appliance changes can be a great investment return option.
Bathroom
- Creating one luxury space in a home can significantly affect your ROI. Analyze your bathroom and look for its focal point. When the focal point is determined, you start the renovation. And when done well, you can get an average of 62% ROI.
Flooring
- it is the most challenging factor in renovating your home; however, changing your old floor is a must, especially when you want a higher ROI. You should tick carpet off your list of flooring. Instead, consider hardwood floors or inexpensive laminate. Just make sure to get a high-quality installation. Depending on your chosen flooring, you can get up to 100% to 150% return on investment.
Major and minor repairs in your home have an effect on your return on investment. Consider thinking about it thoroughly so you will not lose money. Don’t just think about what you want because sometimes it will not complement your house and may not go according to your plan.
List things you want and ensure you have an alternative when it doesn’t complement your home. Learn how to compromise for your own benefit.
Whatever your reason for wanting to renovate your home, it is essential to know which part is worth investing in. As I’ve said, home renovation is not cheap and paying for a home renovation mortgage is not easy. You have to spend your money wisely.
In conclusion:
Choosing the best renovation loans for you will take time. Do the research and understand it sufficiently to know what suits your financial status best. Deciding hastily will only result in losses, and we don’t want that.
Gather your patience and strength when planning to renovate your home. Because it will be draining and exhausting.
