Apply For Renovation Mortgage
What is a Renovation Mortgage?
Have you ever wondered why you are unable to get a loan for your home renovation? It depends on several factors – your home equity, your financial situation, and the market value of your property. This is where a renovation loan comes into play. It is a type of loan that is secured against your property for the purpose of renovations. The term length, rate, and other necessary terms are based on the type of loan renovation loan you choose. You must first identify what you wish to do with the loan amount to get a better idea of how a renovation loan could work in your favour.
Why should you choose a home renovation loan?
Your house reflects your status and personality. When you decide to renovate it, it gives your property an aesthetically pleasing and comforting ambience for you and your loved ones to live in comfort and peace. Having said that, renovation can be a strain on your finances. With the help of a renovation loan, you can use the funds to refurbish or renovate your house without dipping into your investments or savings. They are also an ideal way to upgrade your dream house by giving the homeowner certain benefits like repaying the loan amount without any defaults.
How It Works
Reasons to choose a renovation loan:
That’s an excellent question and below are some of the reasons why should consider applying for a bad credit mortgage. Have a look below:
Lesser interest rates
The most significant benefit of applying for a renovation loan is that you can avail a lesser interest rate, which reduces the financial burden in your monthly EMIs by making easy payments without any stress. However, it is worth pointing out that the interest rate on renovation loans depends on several factors like loan-to-value ratio, credit score, the job profile of the borrower, loan payment tenure, location of your property etc. It is important that you convince your lender that you will repay your lender without fail.
Several tax benefits
Applying for a renovation ensures the borrower avail of certain interest deductions. The tax benefit received on payment of your renovation loan enables you to lower the overall cost of borrowing.
Fewer documents required
Another significant benefit of taking out a renovation loan is that the borrower needs to submit minimal documents to get their loan approved. The documents that need to be submitted alongside your renovation loan application are:
- Identification proof: Driving license, employee ID card, Social Insurance Number (SIN), any other government identification.
- Proof of address: Passport, driving license, utility bills (any one of them).
- Three months’ salary slips if the borrower is a salaried individual.
- Property title deed.
- If the borrower is self-employed, they must submit their last three months’ bank statements.
Immediate processing
With the borrower needing to submit minimal documents, the process of applying for a renovation loan is simple, quick and straightforward. You don't need to wait for an extended period to get your loan approved. You can apply for it online as well and get your loan processed swiftly. As mentioned above, to apply for a renovation, you will be required to submit your personal, employment and financial details, including adding your repayment tenure and the loan amount. Upon submission, the lender will validate your application and check to see if everything is on order. Once everything is fine, the lender will approve your loan and authorize the amount to get credited to your registered bank account.
No restriction on how to use the funds
One of the advantages of a home renovation loan is that there is no restriction on using the funds to renovate your property. The permitted loan amount can be used for refurbishments, renovations, repairs, flooring, extensions, painting etc. So, if you decide to give your house a fresh coat of paint or refurbish your home for the holidays to welcome guests, a renovation loan can cover all these costs mentioned above. Please note that the loan amount cannot be used to repair or purchase furniture, fixtures, or furnishings.
To find out more information on why you should choose a renovation loan, please do not hesitate to give our professional and friendly staffs a call today to schedule an initial consultation.
How to get the best interest rates for renovation loans?
Renovation loans allow you to finance your home repairs to help significantly improve your property’s retail value and aesthetic appeal. With few remodelling projects like bathroom and kitchen renovations costing as much as $20,000, not many Canadian homeowners can afford these projects only through a renovation loan. The best renovation loans have lesser interest rates, low fees, and the loan amounts are flexible. The application process of these loans should also be straightforward, and the repayment terms should be reasonable.
How to get a renovation loan?
The first step is your must do your market research. Identify different lenders, both traditional and private. Use a comparison tool to see the various interest rates available, including home equity financing, credit cards, or personal loans.
In order to find out the interest rates for which you qualify, the lender will also have to do their due diligence. This will show up on your credit report. This information can be used to determine what loans you prequalify for and their terms and monthly payment requirements.
The lender will ask for your previous tax returns, or at least your credit report and bank statements. Additionally, the borrower will be requested to submit proof of homeownership along with any government-issued identification.
Once you have all your paperwork in order, you can submit your loan application. You should receive a response within three business days. If your loan has been pre-approved by the lender, it will be approved much quicker.
Advantages of using a mortgage Agent for a renovation loan:
- Save time and money
- Unbiased advice and greater choice
- The fees are usually paid by the lender directly.
- Agents work for their clients, helping you find the best mortgage option.
To apply for a renovation loan or more details, give Harpreet Puri Mortgage a call today at 416 543 9000
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