Renovation Loan Brampton
If you live in Brampton and are considering completing a home renovation project this year, one of the decisions that you will have to make will be how you are going to finance that project. Whether you are considering adding the kitchen of your dreams, finishing your basement, or getting your building an addition, these types of projects can be pricy.
While digging into your savings or even paying the tab with your credit card are options, a better option might be to get a home renovation loan. With interest rates incredibly low right now, this may be one of the most cost-effective ways to complete your home renovation project in Brampton.
What is a home renovation loan?
Technically speaking, it is any loan that you use to finance a home renovation loan, but for the purposes of this article, it is a secure loan using the equity in your home – usually either in the form of a second mortgage or through mortgage refinancing.
Why should you choose a Renovation Loan in Brampton?
Choosing a home renovation loan as opposed to financing your project in other ways has a number of advantages. When you compare it with using an unsecured loan such as a credit card for example, the main advantage if obvious – you will end up paying much less interest on the loan which will make your home renovation more affordable.
Another advantage of using your home equity over something like a credit card is that you will likely be able to get a much larger loan since most lenders will allow you to borrow up to 80% of your home equity. Since home values in Brampton have gone up substantially over the past few years, it is likely that the amount that you can borrow through a home renovation loan is considerable.
Even if you have enough money in your savings and investments to pay for your home renovation on your own, getting a home renovation loan may still be a better course of action. This is because of how low interest rates are right now. You may be better off to leave your investments where they are and potentially earn more on them than you would have to pay on your loan.
Finally, there is the value that you can get from your home renovation itself. Completing certain home renovations can give you added enjoyment from your home, but they can also increase the value of your home. That means when you finally decide to sell your home, the renovation could actually pay for itself!
How to get the best rates for Renovation Loans
Before you apply for your renovation loan, it is important that you find the best rate. Even a small difference in the interest percentage can equate to a lot of money depending on how much you are borrowing.
The easiest way to find the best rate for your renovation loan is to work with a mortgage broker. Mortgage brokers have contacts with a number of different lenders, and they can shop around on your behalf to find the best rate possible based on your situation.
Even if your credit is less than perfect, your mortgage broker can still help you find a competitive rate with an alternative or private lender.
How to get a Renovation Loan?
Your first step if you would like to apply for a renovation loan is to contact your mortgage broker. Your broker will sit down with you and review your situation including your credit rating, your home value (this may require you to get an appraisal), and various details of your financial situation.
Based on his or her findings, your broker will then go through their database of lenders to find you the home renovation loan that is most appropriate for you. They will let you know what information the lender will require and what documents to gather.
Once you have gathered the appropriate documents and any other requirements (such as a home appraisal) have been completed, your broker will help you complete the application and submit it to the lender.
As soon as you are approved for your renovation loan, you will receive the cash which will allow you to pay for your renovation project.
Advantages of Using a Mortgage Broker for Renovation Loan
While it isn’t strictly necessary to work with a mortgage broker to get your renovation loan, there are several advantages to doing so. Some of the advantages of working with a broker include:
- They can help you determine the best kind of renovation loan to get based on your circumstances.
- They can help you secure the best possible rate.
- They can help you get a home appraisal and let you know what documents to gather for your lender.
- They can ensure your application is complete and answer any questions you may have.
Contact us today!
If you would like to learn more about getting a renovation loan in Brampton, contact us today to speak with one of our brokers.