Paula Siemens

Whether you intend to purchase and spruce up a "fixer upper" or wish to make changes to your current home this spring, deciding how best to finance home improvements is the starting point to a successful project.  The key questions to ask are: how much will all this cost and how will it affect the value of the property? 

The main ways to finance home improvements are cash, credit cards, a line of credit, a mortgage which includes the costs of renovations, or refinancing one's current mortgage. 

►     Smaller projects - say under five thousand - it may make sense to simply use cash, or perhaps a credit card.  Keep in mind, however, that credit cards and payback plans offered by retailers often involve high interest rates. 

►     Medium-sized projects - costing from five to twenty thousand - a personal line of credit allows you to withdraw funds to purchase materials as you wish for a set period.  The real benefit is that you can put a line of credit in place for a one-time cost and charge up then pay it down many times over, never needing to re-qualify.  Lines of credit secured by cash or a mortgage usually have an interest rate much lower than with credit cards. 

►    

Large projects - mortgage financing is an option here, as it allows you to access more favourable rates.  For home buyers, you may qualify for a mortgage which allows you to incorporate the cost of immediate home improvements into your mortgage.  For current homeowners, it could pay to refinance your existing mortgage - up to 75% of your home's value with a conventional mortgage, or up to 95% with an insured mortgage.  You may also wish to consider consolidating a range of higher interest borrowings (credit cards and car payments, for example) at the time of your mortgage refinancing, thus reducing your interest rate and monthly payments. 

Take the time to establish a clear idea of the improvements to your home and how you will pay for them - ideally, a well-planned renovation can boost both your enjoyment of your home and its equity.

Independent Mortgage Advice Is Yours

To meet your needs, or those of friends & family,

I can...

• Shop the market to find you the best rates and mortgage products, whether you are purchasing a home, refinancing or renewing your mortgage.
• Counsel you on credit and mortgage qualifications.
• Simplify the financing process.

Paula Siemens

Mortgage Consultant

Phone: 604-351-7438

Fax: 604-648-9106

Email: psiemens@direct.ca

Web: www.yourbcmortgagebroker.com