Financing your Home Renovation



Everything you need to understand about financing improvements to your home

Not happy with your home?

Before looking to move, it might be worth considering the renovation of your current home.

 

If you’re not entirely happy with your existing home, renovation financing can allow you to turn it into your dream home with a new bathroom, kitchen, or even an extension.

 

In many situations, improving your current home is cheaper than finding a new one. A lot of homeowners may be surprised to find out that even a major home improvement project can cost less than just the fees involved when buying and selling homes.

 

Transform your existing property.

Home improvements can be expensive and stressful. However, the same can be said for the process of selling your home, negotiating with buyers and trying to find a new home that is a better fit for you. Unless you are looking to relocate completely, you could be better off for investing in a major home improvement project.

 

Here at Thrive Mortgage Co, though we can’t make the renovations any quicker, we can reduce the stress of financing your home improvements.

 

With your budget in mind, we’ll help you to identify the best financing options for your project. Additionally, if you’re undertaking renovations to make you home more suitable for a physical disability, we can make sure that you have the most up to date information related to any rebates or tax credits you may be eligible for.

 

Ready to get to work?

Click here to begin financing your renovation, or take a look below at our guide to home improvement financing.


Renovation Financing Guide / FAQ:

  • What does HELOC stand for?

    Home Equity Line of Credit, or HELOC, is essentially a secure line of credit. 

     

    This works just like any other line of credit but, by using your home equity at collateral, you are able to get a far more attractive interest rate on your loan.

     

    HELOC’s can only be taken for up to 65% of your home’s value (less any outstanding mortgage debt). Though you are able to access as much as 80% of the property value, the credit amount cannot exceed 65%. As an example, if a property is valued at $600,000, the maximum allowed equity (80%) is $480,000. If you still owe $200,000 of the mortgage, the equity available as collateral against a line of credit is $280,000


  • Should I get a mortgage or a HELOC?

    Each has its advantages for different situations 

    With a HELOC, you will only be paying interest for the time that you need the funds. However, the flexibility of this comes with a higher interest rate as you’ll pay a premium on top of prime.

     

    However, with a mortgage you will be paying a much lower rate, but you’ll need to start paying interest on the full amount right away, not just on any funds that are needed in the short term.

     

    The best option for you depends entirely on the project you have planned. Our experts will help you to understand the best options for your requirements in order to ensure you pay as little interest as possible. 


  • Should I remortgage after my improvements have been completed?

    We would normally recommend refinancing before starting any renovation project in order to have funds available in advance.

     

    It isn’t a good idea to use unsecured lines of credit or max out credit cards. This can have a negative impact on your credit score and will inhibit your eligibility for refinancing options in the future.

     

    It’s also worth ensuring that you have a 20-40% buffer available. Things don’t always go to plan, and it pays to be prepared for any eventuality. 

     

    To avoid paying more interest than necessary, a line of secure credit can be made available for the duration of the renovations. Once completed, we can look into converting the line of credit to a mortgage at a far lower interest rate.


  • Is it possible to have multiple lines of credit?

    We will always make sure to recommend lenders who are able to provide flexible solutions. Many will allow a combination of as many as five mortgage segments that can be structured for credit diversification and tax efficiency. They will also permit up to three lines of secure credit.