Create your dream home, by renovating the home you already live in. All you need is a home renovation mortgage.
Sometimes you can have a jewel of a property without even realizing it. You can easily create your dream home by doing home renovations. This might seem scary or expensive, but the good news is, this can all be done with home renovation financing. It does not have to be expensive if done right!
Many Canadians have taken advantage of the historic low mortgage rates and rising real estate values by refinancing their mortgage loan. There’s never been a better time to access the extra funds that can help bring your home to that next level of comfort and even improve your home value.
FINANCING IS AVAILABLE FROM INSTITUTIONAL LENDERS AND FROM PRIVATE LENDERS. WHATEVER YOUR RENOVATION/CONSTRUCTION NEEDS, WE HAVE A “MONEY SOLUTION” FOR YOU. ANY SIZE OF FUNDING IS NOT A PROBLEM AS WE HAVE THE LENDERS TO GET YOU THE MONEY YOU NEED.
Before you start refinancing your home renovations, you should talk to an expert in the field. This is where we come in. We will help you find the best home renovation loans, and advise you on how much you can borrow.
There are many homes for sale that have great potential. But a lot of these homes need renovations done to become the best home to live in. Yes, the value of these homes is attractive, but the financing of the necessary work has often been difficult. Wouldn’t it be nice if it were possible to buy that “fixer-upper” at a great price, immediately have it renovated into your dream home, and do it all with one manageable mortgage, and a minimum down payment?
Well, it’s possible with a CMHC “Purchase Plus Improvements” mortgage. You can purchase a home, renovate it the way you like, and pay for it all in one mortgage payment at first mortgage rates. All of this can be done by putting down as little as 5% of the “as improved” value. We at Money Solutions Inc. can help you with all of this!
Secured lines of credit and home equity loans: These options offer all the advantages of regular lines of credit or loans, but are secured by your home’s equity. They can be very economical since they offer preferred interest rates, however initial set-up costs including legal and appraisal fees usually apply. Lines of credit and home equity loans are usually limited to 80% of your home’s value.
Mortgage refinancing: When funding major renovations, refinancing your mortgage loan allows you to repay your loan over a long period at mortgage interest rates. This is usually much lower than credit card or personal loan rates. This type of financing can allow you to borrow up to 80% of your home’s appraised value (less any outstanding mortgage balance). Initial set-up costs including legal and appraisal fees may apply.
Financing improvements upon purchase: If you’re planning major renovations for the home you’re about to purchase, it may be advantageous to finance the renovations with a home renovation mortgage loan. CMHC Mortgage Loan Insurance can help you obtain financing for both the purchase of your home and the renovations — up to 95% of the value after renovations — with a minimum down payment of 5%.
When you have decided you have found the house, have a qualified contractor put together a description and a cost estimate for the proposed repairs or renovations. Bring your “contractor’s Estimate” to your broker. Then make that offer conditional on getting a CMHC “Purchase Plus Improvements” Mortgage. Since the offer will be conditional on arranging this type of financing you are not at risk in the event that CMHC feels that the cost of the proposed renovations is not fully reflected in the “as improved” value. Next, your broker will submit your application along with the “offer to Purchase” to CMHC on your behalf and get back to you very quickly with the decision.
For example, if you purchased a home for $120,000 and wanted to do $30,000 worth of renovations, CMHC will insure a mortgage based on 95% of the “as improved” value. In other words, with a down payment of $7,500 (5%), CMHC will insure a mortgage of $142,500. The key for this to work is that the cost of the renovations has to be reflected in the “as improved” value of the house. In this example, CMHC would have to agree that the house would have a value of at least $150,000 after the $30,000 worth of proposed renovations are done.
The insured home renovation mortgage loan will be based on the lower of either, the purchase price plus the actual cost of improvements or the “as improved” market value. (see below for example scenarios)
Remember, however, that in the case of 90-95% financing is only available if the lending value does not exceed the price ceiling for your area. Price ceiling are either $175,000 or $300,000.