Day: November 5, 2023

Home Equity Loans and Renovation Line of Credit

Home renovations are an excellent way to improve the value of your property, make your home more comfortable, and increase your enjoyment of it. However, these improvements can be quite expensive and require a lot of planning and budgeting. Taking out a home renovation loan to cover these costs can help you avoid having to tap into your emergency fund or overspend on the project.

What are the disadvantages of a home equity line of credit?

There are several different options for home renovation loans canada available to homeowners, ranging from secured mortgage refinancing to personal loans. Renovating your home is often a significant investment, and lenders will want to ensure that you have the financial capacity to meet your repayment obligations. This is why many lenders will take into account your credit score and debt to income ratio (DTI), which considers how much you owe versus how much you earn.

Mortgage Add-On Plans

Renovating your home can be an expensive proposition, particularly with the notably high prices of construction materials such as wood. Fortunately, many Canadian lenders offer mortgage add-on plans that allow you to use future home equity to finance your renovation expenses at a lower interest rate than you would get with a regular mortgage. This type of loan is an ideal solution for real estate investors who aren’t sure how extensive their renovation will end up being and prefer to keep the costs of their home financing as low as possible.


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