Loans Canada: The Country's Best Loan Comparison Platform
Being a Canadian homeowner certainly has its benefits. However, many ‘fixer-upper’ homes require a ton of work before they are 100% livable, such as new paint, plumbing, flooring, and roofing. Alternatively, you might just want to make general improvements or additions in order to brighten up your home or resell it at a profit someday.
No matter what the purpose for your home improvements are, the renovations themselves can be relatively pricey, especially when you factor in the cost of all the materials, labour, and potential permits that may be involved. The good news, this is where a home improvement loan can help you finance all of those things over time.
Traditionally, a home improvement loan is applied for through a bank or credit union, often times the same lender that holds your mortgage. If approved you can use it to finance whatever renovations are on your bucket list, then repay your borrowings through equal installments.
All this said, finding the right type of financing for your next home improvement project doesn’t need to start and end with your bank, there are several other options to choose from.
Savings – When you already have a mortgage on your property, adding another credit product to your profile may not be the best move, as in can increase the number of payments and interest on your plate each month. So, if you’re planning to make smaller renovations, using up the funds in your savings account may be a better choice.
Credit Cards – Another good solution for smaller improvements, your credit cards are beneficial because they allow you to make minimum payments when you can’t afford your full monthly balances. If you prefer, you can also make more than one payment per month, which will quickly increase your credit score.
Home Equity Line of Credit – Once you’ve built up sufficient home equity, you can apply for a revolving line of credit that’s equal to 65-80% of your property’s total appraisal value. Similar to a credit card, you may borrow from this credit line as needed, then make monthly balance repayments. The better your renovations are, the more equity your home will accumulate, as you’ll be boosting its value along the way.
Interested in more information about how to build home equity in Canada? Click here.
As previously mentioned, making renovations is a good way of improving the overall quality of your home. It’s also one of the most effective ways to drive up the value of your property, which will definitely work to your advantage if you’re hoping to resell it in the near future.
With an appropriate amount of financing, you can:
Check out our top budgeting tips for a kitchen renovation, click here.
While the renovations above are some of the more common ways that homeowners choose to improve their properties, there are plenty of other things that you can do with the financing you receive from a home improvement loan.
However, you should always discuss your options with a professional advisor before you actually apply because, like any credit product, a home improvement loan comes with several pros and cons that may affect the health of your finances.
To learn all about borrowing using your home equity, check out this article.
Unlike some credit products you can access in Canada, a home improvement loan may be a sizable sum of money for your lender to dish out, which is why the approval process may take more time and effort to complete.
Generally speaking, lenders will be more willing to approve you for a larger loan with a lower rate and a customizable repayment plan, as long as you can prove that you’ll be responsible with the funds that you would be borrowing. As we said, the value of your home will also play a significant part in the approval process.
For the best chances of receiving approval and favorable conditions for your home improvement loan, it’s important to prepare your finances with some of the following steps:
Suffice to say, there are a lot of different considerations to make when applying for a home improvement loan in Canada. However, getting the right help can put your mind at ease and lead to the best loan conditions available. Loans Canada can help match you with a licensed mortgage broker to help you find the right home improvement financing to meet your financial needs.
Note: Loans Canada does not arrange, underwrite or broker mortgages. We are a simple referral service.
Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.
Whether you have good credit or poor credit, building financial awareness is the best way to save. Find tips, guides and tools to make better financial decisions.
goPeer is Canada's first consumer peer to peer lending platform and connects creditworthy Canadians looking for a loan with everyday Canadians looking...
The Loans Canada team sits down with Gary Schwartz of the Canadian Lenders Association to talk about open banking.
All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.
When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.
Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.
