Home Improvement loans

Home Improvement /Renovation Loans

Purchase Plus Improvement Program

Home improvement loans also referred to as renovation loans can be acquired for finishing your basement, adding a family room, or completing other types of smaller-scale home renovations like a new roof or replacing windows.

Adding Value to Your Home

Home improvement loans are intended to increase the value of your home so it is important to think carefully about where to best put the money.

After all, the money spent on home improvements is added to the overall cost of your home and you will want to recoup that cost when you decide to sell.

Research has proven that upgrades to bathrooms, kitchens or exteriors offer excellent return on investment.

Types of Financing

Typically, small scale home renovations are financed in one of the following four ways:

  1. Refinancing of the first mortgage;
  2. Second mortgage with a fixed interest term;
  3. Home line of credit; and
  4. An unsecured personal term loan or line of credit.

Depending on your level of income, debt load, and credit rating, you may be able to get an unsecured term loan or line of credit to complete the work.  If the repayment period is expected to be more than one year, you may want to set up a term loan and establish a set monthly repayment that fits your projected budget or a home line of credit as a second mortgage registered against the property.

For a repayment period greater than one year, a longer-term mortgage would be considered as a secured construction loan whereby a higher potential amount of borrowing and lower interest rates can be obtained.

Looking for ways to improve your home to make more impact?

  • If you have a 2 bedroom, 2 bath house, consider adding a third bedroom
  • Consider adding a second bathroom to 3 bedroom, 1 bath house
  • In any type of house, bathroom and kitchen upgrades usually net the biggest return
  • Curb appeal is important; landscaping or exterior painting makes a big difference to the perception of your homes’ value

Although the goal of your home improvement loan is to make repairs or upgrades to your home, the challenge is to make that money go as far as possible, raising the value of your home above the level of money spent.

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