Renovation Loan Mississauga
As concerns over the pandemic are still limiting travel, many homeowners in Mississauga are looking into ways to make their own homes more enjoyable and functional for their families. And this includes undertaking home renovations that many having been dreaming about for a long time. Whether it’s a new kitchen, or the perfect summer outdoor oasis, homeowners will be busy transforming their homes this year. Of course, these renovations do come at a price and homeowners in Mississauga will have to find ways to finance these renovations. And one way to do this is through a home renovation loan.
What is a home renovation loan?
Just like the name suggests, a home renovation loan is a loan that helps you pay for a home renovation. And while such a loan could technically come in almost any form, it commonly comes in the form of a loan that is secured using one’s home equity (often either a second mortgage or through home refinancing).
Since most lenders will allow you to borrow up to 80% of your home equity at a fairly low interest rate, this type of loan is a good option when you have a pricey home improvement project that you would like to complete.
Why should you choose a Renovation Loan in Mississauga?
It is no secret that the right home improvement projects can help you to enjoy your home more and that they can even help you increase the value of your home so that you can get more when the time comes to sell. But why fund your renos through a home renovation loan as opposed to some of the other options that are available?
Low interest rates are one reason. Currently interest rates are very low and borrowing from your home equity is one of the most affordable ways to borrow. Even if you have the funds in your savings or investments to pay for your home renovations upfront, you could be better off leaving them where they are and getting a low interest second mortgage or home refinance.
And home renovation loans are much more affordable than unsecured loans such as using credit cards or even a personal line of credit. On top of that, since you are borrowing from your own home equity, you don’t need to have perfect credit either. Your mortgage broker can help you find the lender that is the right fit for your and your situation.
How to get the best rates for Renovation Loans
If you want to find the best possible interest rate for your renovation loan, you should contact your mortgage broker. Mortgage brokers work with dozens of different lenders and they will be able to shop around on your behalf in order to get you the best deal.
Even if you already know that you would prefer to work with your own financial institution, your broker may be able to get you a better price even there.
How to get Renovation Loan?
So you’ve decided to go ahead with some home renovations that you would like to finance with a renovation loan. What now?
Your first step should be to contact your mortgage broker. Your broker will sit down with you and review some key information such as your credit score, how much you still owe on your mortgage, when your mortgage renewal date is, how much equity you likely have in your home.
They will then run some calculations to find the most affordable type of renovation loan for your (eg. Second mortgage vs. refinancing, etc.).
Your mortgage broker will then go through their database of suitable lenders to find you match. At the same time, they will ask you to gather the information they will need from you for the application process. This will generally include financial documents such as proof of income, assets, and liabilities. Depending on how much money you are looking to borrow, it may also include a home appraisal – but don’t worry, your mortgage broker can guide you on this as well!
Once you have all the necessary information, your broker will help you with the application and submit it to the lender on your behalf.
Advantages of Using a Mortgage Broker for Renovation Loan
While it is possible to get a renovation loan without a mortgage broker, there are many advantages to engaging this process through a broker. These advantages include:
- Your broker will review your information to recommend the most affordable type of renovation loan for you.
- Your broker will shop around to help you get the best possible interest rate on your loan.
- Your broker will advise you on what information to gather for your application and if necessary, assist you in getting a home appraisal.
- Your broker will answer any questions you may have and ensure that your application is complete.
Contact us today!
Are you interested in learning more about getting a renovation loan in Mississauga? If so, contact us today to speak with one of our brokers