Renovation Loan Toronto
For many who live in Toronto, the ongoing concerns about the pandemic have meant that they won’t be able to travel this year. As a result, many are looking for ways to help them better enjoy their homes – and for some, this means home renovations
Although home renovations are exciting and they can help you get more enjoyment from your home and even increase its value, these improvements can be expensive. Rather than digging into your savings or using high-interest credit cards, a good way to finance your home renovations is to do so through a home renovation loan.
What is a home renovation loan?
A home renovation loan is any loan that you take out to conduct home renovations, but for the purposes of this article we will be talking about using your home equity – either in the form of refinancing or a second mortgage.
Since many home renovations increase the value of your home, it just makes good sense to use some of the equity that you have already accumulated in your home to fund these types of projects.
Why should you choose a Renovation Loan in Toronto?
There are multiple reasons why it makes sense to get a home renovation loan in Toronto. Currently interest rates are very low, so even if you have enough savings to pay for your renovation outright, it might make more sense to keep your own savings in investments where you are earning money, and use a low interest home renovation loan to finance your home improvements.
If you do not have the capital to pay for your renovations upfront, then using a home renovation loan makes even more sense, since you will likely be paying a much higher interest rate on other types of loans.
How to get the best rates for Renovation Loans
Getting the best rates for your home renovation loan in Toronto is as easy as setting up an appointment with your mortgage broker. Your mortgage broker will help you investigate how much equity you have in your home (most lenders will allow you to borrow up to 80% of this amount).
Based on the renewal date of your current mortgage, your mortgage broker will also help you determine whether it will be more cost-effective for you to get your home renovation loan through a second mortgage or through refinancing.
Finally, your mortgage broker will go through their extensive contact list of appropriate lenders to help you find the best rate for your home renovation loan.
How to get a Renovation Loan?
To get a home renovation loan, you should contact your mortgage broker. They will go through the steps above to help you get the best possible rate for your circumstances. Once they have determined the best type of home renovation loan for you, the application process will begin.
While the process may vary somewhat from lender to lender, it will generally include a credit check, an assessment of how much equity you have in your home (in some cases, this may require a formal appraisal), and the gathering of certain personal and financial information such as your income, assets, and debts. (Your mortgage broker will give you a full list of exactly what documents will be required).
Once all the necessary information is collected, your mortgage broker will send your application along with copies of necessary documents to the lender for approval.
Advantages of Using a Mortgage Broker for Renovation Loan
While it is possible to work directly with a lender instead of going to a mortgage broker to get a home renovation loan in Toronto, this is rarely the best course of action. Working with a mortgage broker has a number of advantages including:
- They can help you determine the best type of home renovation for you (refinancing vs. second mortgage) based on which one will ultimately be more cost-effective
- If you require a home appraisal to determine how much equity you have, they can help set that up for you.
- Mortgage brokers work with a wide range of lenders, so they can shop around on your behalf in order to help you get the best rate on your home renovation loan.
- They can assist your through every step of the application process including advising you on which documents to gather and ensuring that your application is complete. (This will help avoid unnecessary delays).
- They can answer any questions you may have about your loan or the process.
- In most cases, working with a mortgage broker is free and it can save you time and money!
Contact us today!
If you are considering making some improvements to your Toronto home, we would love to help you get a home renovation loan to finance it. Contact us today to set up an appointment with one of our brokers.