Home Renovation Financing
Our guide to understanding and succeeding with home improvements
Hate the home you own?
Hate the home you own?
Before you call your Realtor, weigh the pros and cons of renovating your existing home.
If you're less than thrilled with your current home, home improvement financing can give you the funds you need to finally score your dream kitchen, bathroom or backyard.
In most cases, renovating is cheaper than moving. In fact, many homeowners find that the cost of their home improvement project - even a major one - winds up to be lower than the real estate fees are when selling and buying a different property.
Transform your current home.
Transform your current home.
Let's face it — renovations can be costly, time-consuming and stressful. Unfortunately, the same is true when it comes to listing your home for sale, dealing with buyers and searching for a new home that better suits your needs. Unless you want to relocate altogether, you might be further ahead by investing in a major home renovation.
Here at the Silverman Mortgage Group we can't make your contractor work faster, but we can take the stress out of financing your home renovation project.
We'll review you home renovation budget and help you find the best way to finance your project. And if you're renovating to accommodate a physical disability for yourself or a loved one, we can give you the latest information on government rebates and tax credits related to home renovations.
Ready to get started?
Ready to get started?
Click here to get started
on your home improvement project. Or check out our home renovation financing guide below.
Home Renovation Guide
Jordan de Brouwer
"I had a great experience with them. I was a first time home buyer and didn't know much about the mortgage application experience. They made the whole process very easy and stress free and explained each step in detail. I would recommend them to anyone looking for a mortgage, especially first time home buyers."
Leah Allen
"We purchased a second property and Silverman Mortgage Group made the process so easy and quick. I especially liked the personalized video presentation which made it possible for us to clearly understand the process. At a very busy time in our lives almost everything was completed in the comfort of our home."
Reid Arkinstall
"My wife and I had a great experience working with the Silverman Mortgage Group. It took us a while to find the right home but Zach and his team worked with us throughout the entire process, ensuring we always had the most up-to-date mortgage information. We look forward to working with SMG in the future."
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Related Articles
Whether your dream home is just a renovation away or you simply need some updates to your space, refinancing might be the key to bring everything together and boost your home's value at the same time! Existing Home Owners - Mortgage Refinance Probably the most straightforward solution, if you’re an existing homeowner, would be to access home equity through a mortgage refinance. Depending on the terms of your existing mortgage, a mid-term mortgage refinance might make good financial sense; there’s even a chance of lowering your overall cost of borrowing while adding the cost of the renovations to your mortgage. As your financial situation is unique, it never hurts to have the conversation, run the numbers, and look at your options. Let’s talk! If you're not in a huge rush, it might be worth waiting until your existing term is up for renewal. This is a great time to refinance as you won’t incur a penalty to break your existing mortgage. Now, regardless of when you refinance, mid-term or at renewal, you’re able to access up to 80% of the appraised value of your home, assuming you qualify for the increased mortgage amount. Home Equity Line of Credit Instead of talking with a bank about an unsecured line of credit, if you have significant home equity, a home equity line of credit (HELOC) could be a better option for you. An unsecured line of credit usually comes with a pretty high rate. In contrast, a HELOC uses your home as collateral, allowing the lender to give you considerably more favourable terms. There are several different ways to use a HELOC, so if you’d like to talk more about what this could look like for you, connect anytime! Buying a Property - Purchase Plus Improvements If you’re looking to purchase a property that could use some work, some lenders will allow you to add extra money to your mortgage to cover the cost of renovations. This is called a purchase plus improvements. The key thing to keep in mind is that the renovations must increase the value of the property. There is a process to follow and a lot of details to go over, but we can do this together. Our team is here to navigate you through the refinancing process to make your renovation goals come alive. Please reach out anytime!
You're pre-approved for a mortgage, you've been shopping with location in mind, but unfortunately the perfect property isn't jumping out at you. There is no doubt about it, finding the perfect property (within your price range) is a difficult task, especially for first time home buyers. So, before you go and let buyer's fatigue set in, maybe you should consider adding the cost of renovations into your purchase. Let me introduce you to the purchase plus improvements program! When purchasing a home, buyers can add the cost of home upgrades into their mortgage. The program is designed to allow for 10% of the purchase price to a maximum of $40K to be added to the mortgage for renovations and updates. A great option if you can't find something move in ready, and aren't afraid to do a little work! Sounds simple enough, but in all honestly, it's quite the process, there are some pretty strict rules to follow. Firstly, you must provide quotes to the lender ahead of time for the work that you would like to have completed. It is good to note that the renovations will have to increase the value of the property accordingly. Secondly, the lender doesn't give you the money to do the renovations, you have to come up with that yourself. Once the work has been completed, (verified by an appraiser) the lender will reimburse you via your lawyer's trust account. Obviously this program isn't for everyone, buying a home is a stressful endeavor to begin with, the added stress of having to undertake renovations right away might not be a good idea. But then again, if you have the financial wherewithal to handle the cost of renovations and like the idea of making it yours from the start, then this might be just the option you have been looking for! If you would like to know more about the purchase plus improvements program, and how this program might work for you, please don't hesitate to contact us anytime!
You’ve heard the horror stories: basement floods gone wrong, cars that randomly stop running, or a pal suddenly losing their job. Perhaps you’re the type of person who thinks “that will never happen to me!” when hearing one of these stories, but the cold reality is that it very well could happen to you. But don’t panic! All you need is a little money stashed away that most people dub the “emergency fund”. The word emergency can sound a bit frightening, but what it really comes down to is making sure you have some funds set aside just in case something happens that’s suddenly out of your financial control. So what exactly warrants having some extra cash on hand? We knock out a few of those horror stories below. You Or Your Partner Become Unexpectedly Pregnant Surprise! The gift of life has arrived , the only problem is — you aren’t prepared. In a situation where you don’t want to panic more than you already are, lean on the weight of your emergency stash to ease the reaction of surprise news. You Become a Victim of Identity Fraud Never something you want to have to think about, but you can never be too careful. If you’re the unfortunate victim of identity fraud you may find yourself in a situation where all of your cards are tied up. Having some extra cash on the side will help ease the stress of an unfortunate situation. Your Home Requires An Unplanned Repair Being a homeowner means being fully aware that things can change in your environment at any time, and that means unplanned repairs. Whether it’s a roof that needs replacing or a flood in the basement, having the extra funds to cover off unexpected expenses is key You Have To Take An Unplanned Flight Varying life circumstances may force you to take a flight at a moment's notice. In these times, don’t get stuck charging travel to your credit card. Having the money to book a flight whenever necessary could make the difference between a peaceful and not-so-peaceful duration of your flight. You Find Yourself Stuck With a Major Health Expense Canadians are lucky to have the benefits of a country-wide health care plan, but there are some things OHIP simply won’t cover like crutches, casts, splints, physiotherapy, dental care, etc. If you aren’t entitled for additional benefits with your employer, you will certainly want to be prepared for these expenses and more when it comes to medical assistance. Your Car Needs Repairs or Breaks Down Entirely It’s very possible you’ve found yourself in this position before, and if you didn’t have funds lined up to deal with the damages, you will most certainly know the cost of being unprepared. Don’t make the same mistake twice. You Lose Your Job Perhaps the most common reason to have some money set aside is if you unexpectedly lose your job. It’s suggested that the ideal amount to have ready in this situation is three to six months worth of your salary. If that’s unrealistic for you, think about what is realistic and begin working toward that. Of course, there are other circumstances we haven’t listed here when an emergency fund is necessary. The moral of the story is, saving a sum of money for situations out of your control is something worth investing in. This article was written by Shorey Andrews and originally appeared on the Nest Wealth blog on August 30th, 2017.
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A question that comes up from time to time when discussing mortgage financing is, “If I have collections showing on my credit bureau, will that impact my ability to get a mortgage?” The answer might have a broader implication than what you might think; let's spend a little time discussing it. Collections accounts are reported on your credit bureau when you have a debt that hasn’t been paid as agreed. Now, regardless of the reason for the collection; the collection is a result of delinquency, it’s an account you didn’t realize was in collections, or even if it’s a choice not to pay something because of moral reasons, all open collections will negatively impact your ability to secure new mortgage financing. Delinquency If you’re really late on paying on a loan, credit card, line of credit, or mortgage, and the lender has sent that account to collections, as they consider it a bad debt, this will certainly impact your ability to get new mortgage financing. Look at it this way, why would any lender want to extend new credit to you when you have a known history of not paying your existing debts as agreed? If you happen to be late on your payments and the collection agencies are calling, the best plan would be to deal with the issue head-on. Settle the debts as quickly as possible and work towards establishing your credit. Very few (if any) lenders will even consider your mortgage application with open collections showing on your credit report. If you’re unaware of bad debts It happens a lot more than you’d think; people applying for a mortgage are completely unaware that they have delinquent accounts on their credit report. A common reason for this is that collection agencies are hired simply because the lender can’t reach someone. Here’s an example. Let’s say you’re moving from one province to another for work, you pay the outstanding balance on your utility accounts, change your phone number, and make the move. And while you think you’ve paid the final amount owing, they read your meter, and there is $32 outstanding on your bill. As the utility company has no way of tracking you down, they send that amount to an agency that registers it on your credit report. You don't know any of this has happened and certainly would have paid the amount had you known it was due. Alternatively, with over 20% of credit reports containing some level of inaccuracy, mistakes happen. If you’ve had collections in the past, there’s a chance they might be reporting inaccurately, even if it's been paid out. So as far as your mortgage is concerned, it really doesn’t matter if the collection is a reporting error or a valid collection that you weren’t aware of. If it’s on your credit report, it’s your responsibility to prove it’s been remediated. Most lenders will accept documentation proving the account has been paid and won’t require those changes to reflect on your credit report before proceeding with a mortgage application. So how do you know if you’ve got mistakes on your credit report? Well, you can either access your credit reports on your own or talk with an independent mortgage advisor to put together a mortgage preapproval. The preapproval process will uncover any issues holding you back. If there are any collections on your bureau, you can implement a plan to fix the problem before applying for a mortgage. Moral Collections What if you have purposefully chosen not to pay a collection, fine, bill, or debt for moral reasons? Or what if that account is sitting as an unpaid collection on your credit report because you dispute the subject matter? Here are a few examples. A disputed phone or utility bill Unpaid alimony or child support Unpaid collections for traffic tickets Unpaid collections for COVID-19 fines The truth is, lenders don’t care what the collection is for; they just want to see that you’ve dealt with it. They will be reluctant to extend new mortgage financing while you have an active collection reporting on your bureau. So if you decide to take a moral stand on not paying a collection, please know that you run the risk of having that moral decision impact your ability to secure a mortgage in the future. If you have any questions about this or anything else mortgage-related, please connect anytime! It would be a pleasure to work with you!