Assemble a Team To Renovate

You have reached a point where you have decided your home can use some much needed renovation. The reason can be just about anything:

• You are tired of looking at the current state of your home
• A new child has entered into your life or an old one has returned
• There are significant safety issues that need to be addressed
• Going green will save you money in the long run
• You are looking at selling your home and want to increase its resale value

Dilamco, a Montreal general contractor, is a company to consider as a renovation contractor to give you quality advice on how you should proceed. In most cases, homeowners will need some type of help financing their renovation project. Here are some considerations to think about.

Where to begin?

Visit a financial advisor and discuss the options available to you. Then, visit your lender and discuss your plans so you have a solid idea of where you are going with the project. See if you qualify for a pre-approved loan.

Explore the possibilities

You have a number of options, depending on the size of the renovation project, the amount of your personal credit lines available, a home equity loan, or refinancing your existing mortgage.

You can save a substantial amount of money if you can do it yourself. However, in most cases it is best to hire a professional home contractor to do the work as they have a significant amount of experience.

Personal Credit Lines

Evaluate your total available credit from credit cards and personal loans so you will have a good idea of what is possible by using your existing personal credit. If you choose a personal loan, you have the option to make regular monthly payments over a fixed period of time, generally between 1 and 5 years. You can choose between a fixed or variable rate of interest for the term of the loan which is likely to be less than a credit card. To get another personal loan you will have to repeat the application process.

One of the most popular ways to finance renovations, the personal line of credit has the advantage of having a lower interest rate than a credit card. You will get monthly statements to track your expenses.

Equity Lines of Credit

There are two basic types of equity lines of credit: the secured line and the home equity loan. These lines of credit use your home as equity against the loan. You can borrow up to 80% of the current value of your home.

The biggest advantage of equity credit is the interest rate is significantly lower than personal lines of credit and will be tied to the current mortgage rate. There are set up costs to acquire the loan, and possibly legal and appraisal fees to add.

Assembling a team of a reputable home renovation contractor and financial advisor, while assessing your own financial situation will help you choose the financing option that is best for you and ensure that your project is carried out as smoothly as possible.