Financing the renovation of a house, condo or cottage is almost inevitable to proceed with leasehold improvements. Whether you want to expand a kitchen, build a new bathroom or anything else, there are several financing options available to homeowners. But what exactly are they? To help you carry out your work with the necessary funds, here’s how to finance renovation work.
Financing renovation work with a mortgage loan
First, if you are about to buy a new property, the most advantageous solution is to add the cost of the renovations you plan to make to the mortgage you are about to purchase. This strategy amortizes the repayment of improvements over several years by adding them to your mortgage payments. Just remember that you will probably have to provide your renovation invoices to your financial institution.
Lines of credit: a flexible and advantageous option
Another equally attractive option, especially for small projects, such as installing flooring, is to obtain a line of credit. Lines of credit are a very flexible solution. They allow you to access the funds when you need them and pay interest only on the amount used. In addition, with a line of credit, there is no need to provide proof of renovation to the financial institution that grants it.
Saving over time to cover the work
Saving is another way to finance your renovation work. This is, after all, what condo owners systematically do by transferring a certain amount into their contingency fund each month. Having a savings cushion also helps you deal with the unexpected, especially when unavoidable maintenance work occurs.
The shortcoming of credit cards
You can also finance your work by borrowing the amount on your credit card. However, this practice is not recommended due to high interest rates. Personal lines of credit are more favourable.
Save money by doing the work yourself
If you have a solid knowledge of renovation, doing the work yourself usually reduces the amount of the loan. However, hiring a renovation professional is sometimes much more worthwhile to ensure that the work is done properly.
Choose the financing option that suits your needs
Whatever the reason for the renovation work, it most often contributes to increasing the resale value of a home. For a homeowner, the most important thing is to choose the financing option that best suits their situation, needs and the scope of the work planned.
For more information on the subject or to hire the professional services of a team that specializes in construction and renovation work, contact Excellence Construction.