June 27, 2022

Your Guide to Home Renovation Loans

couple across a table from a mortage broker

As everybody knows, the pandemic forced most non-essential businesses to close for extended periods. People were forced to spend vastly more time at home, which in turn led them to invest more in renovations to get more space and pleasure from where they lived.

Homeowners working remotely suddenly needed things like additional office space, so they could have room to focus and get work done away from the loader, busier sections of the home devoted to leisure time. Then again, home renovations also gave children more space to play or even do online learning.

Everybody who lives under your roof benefits from any renovation you do! People’s needs may be complicated and unique, but the good news is that there’s always a way to get a loan for whatever home renovation you need.

Let’s take a closer look at three common options that Burke Financial regularly handles: home equity loans, second mortgages, and a home equity line of credit.

Home Equity Loan

Investing in property is one of the most reliable purchases you can make. Perhaps no investment is more likely to rise in value faster or more assuredly. However, buying a home is likely the largest purchase you’ll ever make, and not everybody has sufficient capital afterwards to cover life’s various needs and wants.

Unlocking your property’s equity that grows over time can be an excellent way to access the money you need today. It’s common for people to use home equity loans when they need to fund home repairs or renovations, especially over the course of the pandemic.

We help homeowners find the right path for them based on their financial circumstances, property value, and life goals. No matter your current credit score, income, or debt levels, Burke Financial loans can help you access up to 85% of the equity in your home to afford that next renovation.

Our team works with Ontario homeowners to improve their financial health. A designated appraiser will determine your home’s market value, which you can borrow against and get a lump sum at a lower interest rate than you could otherwise.

If you’re facing multiple existing debts, a home equity loan can also help bundle them together, so you only have one monthly payment to track rather than several unwieldy, complicated debts. You are free to figure out how to use your loan in any way you wish, but we can help determine which financial course is right for you and keep the process streamlined and simple.

If you have any questions about a home equity loan, don’t hesitate to reach out!

Second Mortgages

Homeowners can leverage the equity they’ve built in different ways. People may reflexively associate mortgages with first-time homebuyers, but taking a 2nd mortgage loan in Ontario is an increasingly popular option because it can potentially give existing homeowners flexibility and quick access to capital.

Perhaps the idea of another mortgage seems daunting or complicated, but it doesn’t need to be! It’s a common borrowing tool. Burke Financial will ensure the process is smooth and streamlined by pairing you with the right money lender, either a new lender or the previous one.

Taking a second mortgage can improve your credit and result in savings of over $1,000 monthly.

Most homeowners aren’t currently in the same financial position they were when they originally signed their mortgage.

If you need to free up money because you’re looking to reinvest in your home, taking out a second mortgage might be your best option. Of course, you’re free to use the wealth you’ve built up in the form of home equity however you want.

People across Ontario took out a second mortgage to landscape their backyard, as it was safer to see people while socially distanced outdoors. Maybe you want to build a playroom for the kids or create a designated, quiet space for you to take calls and get work done.

There’s no shortage of ways to improve your living space while increasing property value. Just talk to us about which financial path is the right one to get you there.

Home Equity Line of Credit (HELOC)

Another common way to leverage your home’s value to buy things today is the Home Equity Line of Credit or HELOC. There is an important distinction between a home equity loan and HELOC, even though both involve using your home as collateral to get more favourable borrowing terms than you would through personal loans, credit cards, or other unsecured debts.

Whereas home equity loans come with fixed payments and a fixed interest rate for the loan’s term, HELOCs are revolving credit lines with variable interest rates. Therefore, the minimum payment amount varies.

Nobody’s financial goals or circumstance is the same, and the solutions need to be just as personalized and flexible. We help clients of all credit levels understand their options to know what tools are available to them.

A HELOC might not be the best option if your debts are too high or you’re set on undertaking some new spending that isn’t really an investment. Credit card debts can run thousands in interest payments, whereas being unable to pay off your HELOC can result in you losing your home. Burke Financial is here to set you on the right path, so you can accomplish your goals in life while sidestepping unnecessary risks or complicated processes.

Using a HELOC to reinvest in your home is a great approach because the initial debts get pumped back into the house, helping it grow in value. Investments and finances aside, you’ll simply get more pleasure out of where you live, and that could be reason enough.

Historically, people enter the housing market when they can afford to and gradually redo parts of their homes over time as their equity and income grow. Pretty much everyone has spent more time at home lately, and the desire to expand it or change things up may be driven by necessity, aesthetic preferences, or financial concern.

Whatever reason you have for renovating your home, the Burke Financial mortgage brokers can help you optimally navigate the financing.


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