{"id":6286,"date":"2020-12-07T14:42:59","date_gmt":"2020-12-07T18:42:59","guid":{"rendered":"https:\/\/financierevictoria.ctx-dev.fr\/?p=6286"},"modified":"2020-12-08T10:57:56","modified_gmt":"2020-12-08T14:57:56","slug":"mortgage-renovation","status":"publish","type":"post","link":"https:\/\/financierevictoria.ctx-dev.fr\/en\/mortgage-renovation\/","title":{"rendered":"Mortgages: An attractive option for renovation"},"content":{"rendered":"\t\t
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Is it a good idea to finance renovations to your house using your mortgage?<\/h1>

Quebecers love to renovate. And in an ideal world, we would all have the cash flow we need to make the desired property improvements without having to borrow. However, this is not always the case.<\/p>

Fortunately, your private mortgage<\/a>\u00a0can help you with your home improvement plans. Here\u2019s how.<\/p>

Mortgage refinancing<\/h2>

When you already own a home, you can use mortgage refinancing<\/a> to finance your renovations.<\/p>

This type of loan allows you to obtain additional funds quickly using the equity in your property.<\/p>

Note that the sum of your current mortgage and the additional amount desired must be less than or equal to 75% of your property\u2019s market value.<\/p>

Carrying out renovation work through mortgage refinancing is advantageous on two levels. First, the interest rate on the refinance loan is relatively low \u2013 significantly lower than that on a credit card, for example.<\/p>

Second, this refinance loan, which can be either fixed or variable rate, can be repaid over a much longer period than a personal loan.<\/p>

Financing your renovations at the time of home purchase<\/h2>

If you are about to acquire a new home, you can choose to build the cost of renovations directly into the initial mortgage you apply for.<\/p>

Using this method, the eligible purchaser can borrow up to 80% of the projected value of the house following the renovations.<\/p>

This type of financing has many of the same advantages as mortgage refinancing: payments are amortized over several years and the interest rate is also very advantageous.<\/p>

To obtain this type of loan, you must be able to justify the cost of the anticipated renovations when applying to your financial institution. And once the renovation work is complete, you must notify them of its completion and\/or present a post-work inspection report, as well as meet all other prerequisites.<\/p>

Renovation financing can be accessed even with a down payment as low as 5% of the property\u2019s purchase value.<\/p>

A second mortgage to finance renovations<\/h2>

If you are a current homeowner and have good equity available on your property, taking out a second mortgage<\/a> can be a great option for financing your renovations.<\/p>

This type of financing, if provided by a private lender<\/a>, does not require a minimum credit score or proof of income. Financing can be granted very quickly \u2013 no need to go through the lengthy process of traditional banks.<\/p>

Note that the sum of the first mortgage loan and the amount required for the renovations must be less than or equal to 75% of the property\u2019s market value.<\/p>

Other methods for financing renovations<\/h2>

Mortgage refinancing and financing at the time of purchase are not the only options available for financing renovations. Other ways include:<\/p>