LETS TURN YOUR RENOVATION DREAMS INTO A REALITY
How can I finance my home renovation?
Whether you’re interested in a renovation to upgrade your homes look, expand your home by adding an addition, want to finish a basement, or improve your home for a future sale - Nikki has you covered financially.
Home renovations can be costly, and with the price of living on the rise, it can be very difficult to save up enough money to cover your renovation costs. Going into debt by financing your renovations on your credit cards is an expensive, non-beneficial approach. Whether you’re a DIY-er or leaving it to the professionals, there are numerous financing options available for you. A home renovation loan can come in many forms including:
Home equity line of credit
Mortgage refinance
Second mortgage
Purchase Plus Improvements
Construction Draw financing
Private Lender
What should you know?
There are pro’s and con’s to everything…
What are the drawbacks of home improvement loans and which is the best option for you?
Home Equity Line of Credit
Pro: Lower interest rates available. Pay interest only to keep your monthly cost down. Only pay interest on the money borrowed. Open to pay in full at any-time with no penalties. Available for you to use again once paid off.
Con: In comparison to 1st mortgage - rate may be higher. It can take a long time to pay off if you are only making minimum payments. You may be tempted to spend more since you have available funds. Potentially difficult to qualify for.
Mortgage Refinance
Pro: Low interest rates. You are paying down principal with each monthly payment. Repayment options are over a longer period making payments more manageable. Only one payment to manage rather than multiple.
Con: Pre-payment penalty could be costly. Higher closing costs. Longer turn-around time until funds are in hand.
Second Mortgage
Pro: Quick approval process (sometimes same day funding). Interest only payments available. Payment-free options available. Open mortgage options available. Flexible terms.
Con: Higher rates. Initial Lender fee. Additional monthly payment to cover. Will need to requalify to consolidate into your 1st mortgage.
What should you know? continued…
What are the drawbacks of home improvement loans and which is the best option for you?
Construction Draw Financing
Pro: Flexible terms. Pay only the interest during construction. Ability to transition into a non-construction financing program. Additional scrutiny, therefore keeping you on budget and on track. Piece of mind that financing is in place throughout construction.
Con: Difficult to qualify for. Visits from lender to confirm completion of each section of construction. Numerous draws. High fees. 10% holdback of funds. High interest rates. Up front fees. Possible interference from Lender. Paperwork heavy. Potential to be risky.
Private Lending
Pro: High entry for approval. Quick turnaround time. No minimum credit score. Minimal restrictions about where the funds are used. Flexible terms. Interest-only/no payment options available.
Con: High interest. Costly fees. Paperwork heavy. Additional monthly payment to cover.