September 21, 2021


Home owners dream about the remodels and renovation they’d love to do to their house. Year after year circumstances comes up which unfortunately take financial priority, and their plans to renovate kitchens, add an income suite, or even given some out-dated features a makeover get pushed aside until “next year”.

Renovation and remodeling projects are within everyone’s budget, no matter the circumstances.  You just need the right guidance on how best to finance your situation, as winding up in debt can ruin your chances of getting larger loan approvals in the future.

Save Up

Placing a Piggy Bank on top your your fridge and adding to it each time you skip a Starbucks Latte or the amount you saved on your Walmart trip is a great way to accumulate money for home remodeling projects which is easy and planning-free. Even setting aside large amounts of money per pay-check takes a considerable amount of time to pay for labour and materials. This option is great for simple remodeling such as painting and less expensive upgrades rather than a full-room renovation or home addition.

Credit Card

A credit card is a good option for new home owners who wish to do a few small remodels to make their place more ideal. Without a huge line of credit or approvals for larger loans, you can use a credit card to pay for your project upfront. The downfall is that this only works on projects which do not exceed your credit card’s limit, therefore it’s best for simple, less expensive projects. You will also want to make sure you have a plan to pay it off quickly because retail credit cards have high interest rates.

Personal Line of Credit

When you apply for a personal line of credit, you’re essentially granted a predetermined loan based on your previous credit history, and agree to pay off a minimum amount each month. The good thing is you don’t have to pay interest charges until you begin using it, and they have lower interest rates than regular credit cards. You also have continuous access to the remaining funds without having to reapply. So what’s the catch? They take a while to pay-off, so this is a good option for long-term, ongoing renovation projects.  This is a good option for a home renovation project, we used this when we added a second story addition and used it to pay our home remodeling contractor in Toronto during the months long project.

Home Equity Loans

A home equity loan is kind of like a line of credit, except they use your house as collateral. For extreme home renovation projects this may be a great option, as they offer the best interest rates and have higher limits- sometimes allowing you to borrow up to 80% of your property’s value! However, since the Housing Crisis in 2007, lenders are now required to verify your finances, which can accumulate hefty lawyers fees out of your pocket. And since you’re using your house as collateral, if you don’t end up paying off your loan you’ll lose your home…there goes a waste of an awesome renovation project!  Know your mortgage rules before going this direction.

Mortgage Financing

If you’re a home owner, chances are you’ll be paying for your home using a standard mortgage. When you purchase a new home with plans to renovate it you can add the estimated costs to the mortgage you’re applying for. If you’re renovating your current home you can refinance your project budget into your preexisting mortgage. Mortgages are great because they typically have better interest rates than home equity loans and lines of credit. However, have you ever heard the term “a slave to your mortgage”? You’ll be paying off the charges for a long time, and you may feel more obligated to stay put to justify the time, efforts, and costs put into your renovation.

So what are you waiting for?

How you choose to finance your home renovation projects all comes down to you! If you’re good with saving, you may choose to pay upfront. If you’re diligent paying off loans, a simple line of credit may suffice. But let’s be real. A majority of us have big plans to remodel and make our home perfect, and money should not be a deal breaker. Suitable finance plans are available for almost everyone. Do your research, ask your contractor, and find out which is best to make your dream renovations come true!

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