Your home is one of the most significant investments you’ll make in your lifetime and building equity and raising your property’s value is an essential component of that investment.
Whether you create your dream kitchen, add a spacious deck or simply apply a fresh coat of paint, using funds for home improvements can add significant value to your property when you decide to sell.
But that’s only part of the story. Home improvements can also have a considerable impact on your family’s quality of life. No matter how small or significant the project may be, it’s worth investing some time and money in your home sooner rather than later.
The Value of Investing in Your Home
As any homeowner will tell you, there is never a shortage of things to do when maintaining a property. This is one of the main reasons people find the prospect of home renovations so daunting.
While some homeowners find it difficult to justify the cost of these projects, the truth is that home renovations can make you money in the long run, all while improving your family’s living conditions.
While you won’t see the profit from your investment until you’re ready to sell, home renovation projects are well worth the trouble if appropriately planned.
What is a Home Improvement Loan?
A home improvement loan can be a home equity loan, HELOC loan, or any loan using home equity used for home improvement purposes. Borrowers will typically use these types of loans to access the capital they need to build on their investment.
According to Statistics Canada, the value of residential mortgage loans from alternative lenders is steadily growing. Canadians choose to opt-out of traditional lenders’ extended waiting periods and paperwork.
The renovation process can ignite a creative spark for many Canadian homeowners. Still, when the financial realities set in, the idea of demolition and decoration can feel more overwhelming than exciting. Homeowners often reach out to the mortgage brokers at Burke Financial for assistance.
Our Award-winning brokerage acts as the middleman and shops around borrowing applications to our network of banks and private lenders. We help homeowners find a lender that understands their financial needs and goals at every credit level. When homeowners take advantage of applying for a home improvement loan, they’re taking their investment a step further.
We help you answer simple questions like what is a home equity loan and help you weigh your options.
Types of Home Equity Loans
Before you start inquiring how to get a loan for your home improvement plans, it’s essential to understand the different types of loans you can apply for.
A fixed-rate home equity loan consists of a single, lump-sum payment, which the borrower must repay over a certain amount of time. The lender locks in the interest rate for this type of loan. If the home is sold, the loan must be paid back in full.
A home equity line of credit (HELOC) acts as a combination of a checking account and a credit card. With an approved limit, the borrower can access the funds whenever needed. As the loan on your home equity is paid down, the borrower has the option of borrowing more — this is often referred to as revolving debt.
Mortgage refinancing is commonly used by homeowners who have accumulated a considerable amount of equity or are in a growing real estate market. This type of loan is slightly different than getting a second mortgage. Refinancing allows property owners to access the equity in their homes at a low-interest rate. Some homeowners use this capital to pay off debts or to execute significant renovations around the property.
As a mortgage broker in Toronto, Burke Financial will be able to take you through each of your loan options so that you can make the best decision for your household.
Qualifying for a Home Improvement Loan
Homeowners without significant savings or who have poor credit often turn to alternative lenders to help facilitate their renovation goals. Your lender is taking a considerable risk by giving you a large sum of capital for your projects. To qualify for a home improvement loan, a lender may ask you to meet any of the following criteria:
- A track record of steady income
- A clear monthly payment plan with an agreed-upon interest rate
- Addressing any claims of fraud if found in your application
- A reliable candidate to co-sign the loan
- Offering an existing asset as collateral for a sizable loan
Some creditors are particular when it comes to the borrower’s credit score and will turn down applications below the 650 average. While that may be a setback for some homeowners, there are resources available to acquire the loan they need.
Burke Financial specializes in finding homeowners in Ontario and Canada the right subprime mortgage lender and the best possible interest rates. Our experienced brokers facilitate the conversation between borrowers and lenders and have the resources to get even the most challenging applications approved. Applying for a home improvement loan without credit or a low credit score is easier with an award-winning team behind you.
Beginning the Renovation Process
Most homeowners can quickly identify which upgrades are most pressing for their homes. Still, anyone unsure of where to begin should start with projects that will bring the most significant investment return.
Unsure of where to get the money to take on such a renovation? Getting a home equity loan can give you the capital to jumpstart these projects and start dramatically increasing the value of your property.
Here are just a few examples of useful home improvement ideas:
- Building an income suite
- Renovating the kitchen
- Renovating an existing bathroom or installing a new bathroom
- Updating flooring and/or fixtures
- Building a deck
- Improving energy efficiency
- Adding a fresh coat of paint
Once you have a vision for your home, you’ll need to look at the financial side of the equation. Home improvement loans are commonly sought out from homeowners across Canada, but how can they help you achieve the vision you have for your property?
How to Make Use of Your Home Improvement Loan
Creating a source of revenue from your property can also put money in your pocket in the short term, as well as have a significant impact on your property’s eventual sale price.
Applying for a home improvement loan is an essential component of the renovation process, especially for first-time homeowners. There is a learning curve for household finances and sustaining a healthy budget but, to maximize your home equity, the option of getting a home improvement loan could be the catalyst to transforming your property.
By turning your basement into a rental unit or building a detached secondary suite like a laneway house, you can make your property work for you. These additions are highly sought after on the open market and can help turn your home into a buyer’s dream.
Upgrading the Kitchen
Many would say that the kitchen is the heart of any home, making it a perfect start point to increase your house’s value.
A sleek kitchen is something that will catch a buyer’s attention, and it doesn’t necessarily take a big investment to get a big return. Something as simple as modernizing the cabinets and countertops or updating the sink and faucet will have an outsized impact on your kitchen’s visual appeal at a minimal cost.
Homeowners will often look at getting a home improvement loan to subsidize the costs of a kitchen renovation because they know the increased value it will bring to the home when it’s time to sell.
Improving the Bathrooms
As with kitchens, an upgraded bathroom can significantly increase your home’s appeal to potential buyers. Bathroom renovations provide an excellent return on your investment, and you get to enjoy your updated amenities until you’re ready to cash in.
If your home has only one bathroom, consider adding another. Like kitchens, bathrooms are high-traffic areas, so adding a bathroom will make daily life easier for your family and immediately increase your home’s value.
A half-bathroom could fit in as little as 18 square feet, so take another look at your extra rooms or underutilized spaces to see where one might work. For a full bathroom that includes a stand-up shower, you will want to have at least 30 square feet. Either way, this kind of project can be efficiently completed in most homes.
Revamping the Floors
Hardwood floors are visually striking and highly sought after by homebuyers, which is why they are often listed at the top of real estate descriptions.
Quality tiles also never go out of style, and they retain their value! So whether in the kitchen, bathroom or the rest of the house, it is worth investing in flooring. Sometimes, merely sanding and staining the existing hardwood floors can be enough to take your home from looking like a fixer-upper to being sought after.
Enhancing the Deck
Potential homebuyers are always on the lookout for outdoor living spaces. Decks help increase your home’s visual appeal and serve a critical function.
These days, staycations have become increasingly popular and working from home has become the new normal for many, so that a well-appointed outdoor space can serve many needs.
A deck’s cost can vary widely depending on size, materials, and details, so it’s always a good idea to seek quotes from multiple contractors if you don’t plan on doing the work yourself.
Energy costs money. Making your home more energy-efficient can therefore lead to significant savings on your regular bills and bump up your home’s value in the process.
Lower Utility Costs
Potential home buyers will inquire about your property’s utility costs, and they could use high monthly fees to negotiate a lower price. This is why some of the best return on investment from home renovations comes from things that usually go unnoticed.
Embracing energy efficiency can be a small- or large-scale project, but even the smallest efforts can go a long way.
Updating the Appliances
Replace old appliances with up-to-date and energy-efficient models. Not only will they look better, but you will see immediate savings on your energy costs. These two factors can have a significant impact on potential buyers.
Replacing the Windows
Ageing, drafty windows and doors can significantly impact your home’s heating and cooling costs. Installing high-quality windows and doors could save you hundreds per year, and they will substantially improve the look of your house.
If that kind of project feels too big to tackle, consider smaller tasks like adding to or replacing the caulking around windows and doors or improving your attic’s insulation.
Depending on where you live, you might also be able to cash in on tax rebates and government incentives to help defer the up-front costs of improving your home’s energy efficiency.
A Little Paint Goes a Long Way
You don’t get a second chance to make a first impression, and neither does your home. Weathered exterior paint looks dingy and can undermine your efforts to get the best price on the open market, which is why a fresh cost of paint is one of the simplest and cheapest ways to increase your home’s curb appeal and the price it will fetch.
Burke Financial Can Help You Get a Home Improvement Loan
To start increasing your home’s value, you will want to make sure you have the funding necessary for the projects you wish to undertake. The best way to go is by taking out a home equity loan for many people. These loans are secure and stable to secure funds with minimal hassle.
The best way to access a home improvement loan is to let a financial expert handle the negotiations. Burke Financial works with clients across Ontario at every credit level, ensuring their application is seen by as many banks and private lenders as possible. Our award-winning team of brokers will ensure you receive the best possible interest rates, putting more money in your pocket and into your renovation.
When used for home renovations, home equity loans can make you money in the long run by increasing your property’s value and could lead to a handsome profit when you are ready to sell. To take out a home equity loan in Ontario, contact the experts.
Get in touch with Burke Financial at 1-877-709-0709 and start the transformation of your home.