We’ve all seen the home makeover show where they take the house built in the 1960’s, tear out the olive green tub and the yellow oak kitchen turning it into something worthy of a home design magazine. They can do it in only 30 minutes, so how hard can it be, right?
Well, the answer is, it does take more than 30 minutes, but you can definitely get the house of your dreams with the right mortgage plan.
Personally, I have owned 4 different houses, and have done varying levels of renovations in each. I have done small renovations, large scale remodeling, and most recently a custom-built Green Home.
Here is how I made mortgage financing work for each of these:
The Quick Fix - Using Purchase Plus Improvements
I had been looking for a house in a specific area and wasn’t having a lot of luck in my price range. Everything I saw needed some kind of work. I found one house that needed some small renovations to make it work perfectly for me, so I got the quotes for the work that needed to be done. I gave the quotes to my lender and they added it to my mortgage, with what is called a “Purchase Plus Improvements”. Once the job was done, I gave them my receipts. In return, I got the funds for that work handed back to me.
This method of improving your home worked so well for me that I did this type of purchase with another home about a year later. It really is the most economic way to get renovations done in your house.
2. The Labour of Love - Refinancing to Refurbish
When my husband and I bought our first house together we fell in love with the bones of the house: the size, the area, the lot, and the beautiful hardwood floors. That was about it. Little by little, we brought our house from the 1920’s back to life. Each time that we did, we would refinance the house to fund our next project. This included a brand new kitchen, new electrical and drywall, new windows and doors. After that, shingles, and paint. A lot of paint. We drastically improved the value of the home through the years, each time being very conscious of what needed to be done with financing to get there.
Financing a renovation this way means you need to have a very clear idea of the value of your home and what the renovations will do to improve it.
3. The Custom Build - Using A Progress Draw Mortgage
Having done constant renovations for the last 12 years, we were ready to hand our dream home over to someone else. We really did our research, checking out show homes and meeting with builders and finally, we decided on a lot and on a builder. It was really important that this builder understood our vision and budget but was still able to give us what we wanted. Over the next 10 months, our plans on paper became the beautiful house we have today. To fund this build we did what is called a Progress Draw Mortgage. I will honestly say this process was more involved than originally expected, but the result is something I could have never imagined.
You may be closer to your dream house than you’ve ever imagined. Just ask your Mortgage Broker.
Your mortgage broker should be a trusted advisor who can help you get the home of your dreams, and minimise your risk in the transaction. There is a huge value in dealing with a Mortgage Broker, like myself, who has been on both sides of financing. I have been the client through more than 6 different types of Mortgages and have also worked with clients on every scale of home renovations and builds. I know the benefits and the stumbling blocks in each and can advise you on the best way to go about getting the home you want. Let meet to answer your questions and ideas about the home of your dreams and our plan to get you there.