Renfi Review: Renovation Loans For Canadian Homeowners

Renfi Review: Renovation Loans For Canadian Homeowners

Written by Lisa Rennie
Fact-checked by Caitlin Wood
Last Updated September 10, 2021

If your home is currently not suitable for your changing lifestyle, you may want to consider updating it rather than moving. In fact, that’s exactly what many Canadians are doing these days.

According to Remax, over half of Canadians made improvements to their homes in 2020 with the intention of remaining in them, while another one-third renovated to enhance their lifestyle for esthetic or recreational purposes. Another one-third renovated for essential purposes, such as for maintenance or safety concerns. 

But considering how expensive home renovations are, is the project you have in mind within your budget? Thanks to home renovation loans from Renfi, it can be. 

Let’s take a closer look at Renfi to help you determine if taking out a home improvement loan is right for you.

Who Is Renfi? 

The people behind Renfi are committed to helping Canadian homeowners get access to the equity they have built up in their homes to cover the cost of expensive home renovations. After experiencing difficulties themselves when it came to securing a home renovation loan from a Tier 1 bank, the Renfi team decided to come up with their own process to help Canadians gain access to financing to fund their home renovation projects. 

Renfi makes use of innovative technologies to ensure quick and secure home renovation loans with the help of fintech and open banking software platforms. Not only is the application process quick, but so is the approval and funding process. 

What Product Does Renfi Offer?

Renfi offers home renovation loans secured as a second mortgage, with approval provided in as little as 15 minutes and funding available within 72 hours. 

  • Loan Amounts. Applicants can get home renovation loans from anywhere between $25,000 to $150,000.
  • Loan Terms. Renfi offers 12-month terms open after  3-months . When your term ends, you have the option to refinance your loan with your first mortgage lender. Otherwise, Renfi can supply you with a new first mortgage, or you can renew the loan through Renfi. 
  • Interest Rates. Renfi’s home renovation loans require interest-only payments at a fixed 1% interest rate. 
  • Types Of Renovations Covered. The funds accessed through a home renovation loan from Renfi can be used to renovate anything you choose, including kitchens, bathrooms, basements, swimming pools, and even landscaping. 

Why Should You Finance Your Home Renovation?

Taking out a second mortgage to finance a home renovation means you won’t have to spend months or longer saving up for a lump sum of money to cover the cost of an upgrade you want to make to your home. A second mortgage is an additional loan taken out on a home that is already mortgaged. Payments will need to be made to both the first and second mortgages. 

The amount that can be borrowed depends on the amount of equity built up in the home. You can borrow up to 90% of your home’s appraised value, less the remaining balance on your first mortgage. The second loan is secured against the amount of equity you have in your home. In fact, lenders tend to place more weight on your home equity than on your credit profile. 

Second mortgage terms are typically one or two years long, during which time only interest payments are made. Once the term ends, the entire loan amount will need to be paid back. Otherwise, you can extend the term or take out a new second mortgage to pay it off.

Second mortgages may be a great option for a few reasons:

  • Good For Cash Flow. Rather than dumping all of your available financial reserves to cover the cost of an expensive renovation, you can keep your cash flow open by making small installment payments instead with a home improvement loan. 
  • Interest-Only Payments. During the term of your second mortgage, you are required to make interest-only payments rather than paying off any of the principal balance.
  • Bad Credit Accepted. While conventional loans require that you have a decent credit score to get approved, a second mortgage allows for less-than-perfect credit for approval. And with Renfi, more than just your credit profile is used to approve applicants. Plus, the loan is considered less of a risk because your home is used as collateral, making these loans even easier to get approved for.   
  • Fewer Penalties. There’s no need to discharge your current first mortgage, which means you won’t have to pay any early repayment penalties, nor do you have to give up the low-interest rate that you may already have with your first mortgage. 

How Does Renfi Work? 

Renfi uses a simple 3-step process to get a loan to finance your home renovation project:

Step 1 – Start Your Application

Complete your online application within a few minutes by providing a few details, including:

  • Your name
  • Your contractor’s information (if you have one)
  • Your online banking information for verification purposes

You’ll need to own a home in order to apply for a second mortgage through Refi. 

Renfi home improvement loans are secured as a second mortgage. Therefore, you can only apply if you or the co-applicant are the registered owners of the property.

Step 2 – Find Out If You Qualify

Renfi will assess the following using secure instant verification:

Step 3 – Get Funded

Once approved, you’ll receive closing documents that you can take to your lawyer to have reviewed. Once the documents have been assessed, your lawyer will send them back to Renfi, after which the funds will be released within 24 hours. 

The Benefits Of Choosing Renfi

There are plenty of reasons why you might want to use Renfi to obtain a home renovation loan:

  • Quick Application Process -You can apply for a home renovation loan in as little as 3 minutes with Renfi.
  • Fast Approval – If your application is filled out in its entirety, you can get approved in 15 minutes.
  • Expedited Funding -Within 72 hours after your application has been approved, the funds requested can be yours. 
  • Fully Online – There’s no need to visit a lender in person. With Renfi, the entire process can be started and completed online. 
  • Low Interest Rate – Depending on your credit and financial profile, you’ll receive the lowest interest rate available. 

Renfi Home Renovation Loan FAQs

Is Renfi a home renovation loan broker? 

Renfi serves as a lender for all loans, which allows them to approve and fund loans very quickly. 

Is Renfi safe?

Yes, Renfi uses software that only allows them to view your account activity, such as balances, deposits, and purchases. They will never ask for your username or password and they will not be able to see this information when the instant income verification is performed. Renfi uses the same level of encryption that big banks use, so your sensitive information will always remain secure. 

What credit score do I need to get a Renfi home renovation loan? 

Renfi looks at several factors to approve a loan. You’ll need to apply for a loan in order for Renfi to determine if you qualify based on your specific credit score. 

How does Renfi verify my income? 

Renfi uses Inverite, a software that allows your income to be verified directly from your financial institution. 

Do I have to use Renfi’s contractors? 

No. Renfi’s contractor list is available for your reference if you don’t already have one.

Final Thoughts

Home renovation projects are typically very expensive and can easily run into the tens or even hundreds of thousands of dollars. But rather than having to skimp and save over time until you finally have enough to update your home, Renfi has a simple home renovation loan option available that’s relatively easy to qualify for.

Lisa has been working as a personal finance writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same.

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