Finding the money for home renovations

Home renovations

Are you living with a circa 1980s-style bathroom, carpet on the floor, cracked tiles, a leaky shower or an old bathtub? Or would you love to upgrade your kitchen or add a new deck to enjoy our beautiful Okanagan summers? How about completing your basement to add a mortgage helper suite?

A recent report determined that 44% of Canadian homeowners have either already completed home renovations in the past year or they’re planning to renovate in the near future.

Perhaps this seems like a daunting proposition as you aren’t sure how you might afford to make these much needed changes, but there are options available.

There are several possible ways that you might finance your home renovations.

• Use your savings

• Use a credit card or an unsecured line of credit

• Home equity line of credit (HELOC)

• A personal loan

• A loan from a family member

These are quick solutions and may work best depending on how extensive and costly your renovations might be or you could perhaps consider a lower cost of borrowing to complete those renovations by obtaining a renovation loan.

Some of the benefits of this type of financing are:

• Lower interest rates

• Lower monthly payments as the loan gets amortized over a longer period

• Access to a higher amount depending on your home equity

• A good option for borrowers who might feel tempted to abuse the flexibility of other home renovation options mentioned above, such as credit lines or credit cards.

You may be tempted to use a line of credit but that may not necessarily be the smartest way to go.

To quote David Chilton, the Wealthy Barber,: “People cannot resist lines of credit.”

“And the worst combination in the country is a line of credit and a home renovation – once they renovate one room, the other rooms pale by comparison, so they go on to the next room and it’s a never-ending cycle of renovation as they get deeper and deeper and deeper in debt,” he added in a speech at a conference of the Canadian Pension and Benefits Institute in May 2011.

If you would like more information about the possible financing options available for your home improvements, please book a time on my calendar for a chat or email [email protected]

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

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About the Author

April Dunn is the owner and a Mortgage Broker with The Red Door Mortgage Group – Mortgage Architects. She has been assisting clients to purchase, refinance or renew their mortgages for over 20 years.

April has experience as a Credit Union manager, a Residential Mortgage Manager with a large financial institution and as a licensed Mortgage Broker. By specializing in Strategic Mortgage Planning she has the tools available to build a customized mortgage plan, with the features and options that meet your needs.

April provides a full range of residential and commercial mortgage financing options for clients all over the province of British Columbia and across Canada through the Mortgage Architects network.

Contact e-mail address: [email protected] or by phone at: 888-561-2679.

Website:  www.reddoormortgage.com

The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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