The Benefits of Getting a Home Renovation Loan
There are many reasons to renovate a home, but most homeowners do so with the intent of increasing their home's value should they decide to sell in the future. Financing home remodelling projects with home renovation loans can be a great way to lower your costs and boost your return on investment (ROI). Here are a few specific benefits of home renovation financing.
Home Renovation Financing is Cost-Effective
While you can use your credit card to pay for home renovations, credit card interest rates can be as high as 18 percent annually. This may not be a big deal for smaller renovations, but when it comes to long-term projects, credit card financing can quickly get expensive. Home renovation loans are a more cost-effective solution to using credit cards to pay for the materials needed for home renovations. While interest rates on home renovation loans vary, they tend to be within the range of Prime plus 2.00 percent (currently, the prime interest rate is 3.00 percent).
Home Renovation Loans Can Help Boost Your ROI
Not only do home renovation loans typically have lower interest rates, but you may also receive tax rebates for qualifying home renovations, bringing the total cost of the project down even further. Add the ability to spread repayment over a long period of time (some home renovation loans have terms of up to 15 years), and you have a financing option that can actually help boost the ROI of your remodelling job.
Home Renovation Financing is Flexible
Home renovation financing is available in different forms, including home equity loans, lines of credit (i.e. HELOCs), and mortgage refinancing. There are also many different terms available to suit every project and budget. If you need the funds for a one-time project, an equity loan with a fixed term of 1 to 5 years may be best suited your needs. If you need more flexibility, a line of credit will allow you to borrow funds as needed without needing to reapply for credit.
If you need more information about home renovation loans, contact us today at our Edmonton office to discuss your home renovation needs and financing options.