RE/MAX Escarpment
Languages
English
Specialties
Buyers, Downsizing, First Time Buyers, First Time Sellers, Investments, New Builds, Residential, Sellers
Locations
Brantford, Burlington, Flamborough, Grimsby, Hamilton, Niagara Falls, Niagara-on-the-Lake, Oakville, St. Catharines, Stoney Creek, Waterdown
Sep 26, 2022
You’ve saved for the down payment but not the money to undertake the necessary renovations. There are options available to help finance the renovations, so you can stop start enjoying your new home.
Renovation mortgage financing is one of the most popular renovation financing options for new homebuyers. It allows you to add renovation costs to your mortgage when you purchase your new home. So if your mortgage was $600,000 to cover the purchase price and you needed $60,000 for the renovations, you would assume a mortgage of $660,000.
So when you apply for your mortgage, you will also estimate all the costs associated with your renovations and add it to the mortgage. Sometimes, you don’t even know everything that needs to be taken care of until you begin a renovation project. That’s why you should always put aside some extra for the “unknown.” This might even just be upgraded appliances or furniture when the renovations are through, but having some money set aside is never a bad thing.
You can use an existing mortgage to pay for renovations. Mortgage refinancing is an option that many investigate if they do not want to obtain funds in other ways (lines of credit, loans, etc.). Mortgage refinancing considers how much left you owe on the house, allowing you to borrow up to 80 per cent of the appraised value.
Refinancing your mortgage allows you to undertake the renovations but spread the payment out over an extended period of time with generally less interest than a credit card or personal loan rates.