Edmonton and Calgary’s decidedly gray Fall may be inspiring you to warm up the inside of your home with new wall color, floor covering or one of those fab IKEA kitchen’s, even. I mean nothing cheers a person up like a new pantry!!
You may be able to tap into the equity in your home to make those renos a reality. The first thing on your to do list should be to contact one of our Mortgage Brokers to discuss how much equity is currently in your home, the new mortgage amount you may qualify for and what your new mortgage payment would look like. We want to make sure that increasing your mortgage balance fits into your short and long term financial plans.
We’ll also discuss with you any pre-payment penalties you can expect to pay if you decide to break the mortgage you have in favor of one of the current, historically low rates. Your other option for refinancing is to stick with the lender you are with at the moment and have them increase your mortgage. Instead of breaking your mortgage, your lender will blend your mortgage rate with their current rate to arrive somewhere in the middle and this will allow you to avoid paying a pre-payment penalty. Typically, you will keep your current term, so if you have two years left on your mortgage, you will get your new, blended rate for the remaining two years.
Sometimes it’s more beneficial to pay the penalty to break your mortgage and obtain one of the very low current rates for a longer term, especially if there is enough equity in your home to cover your reno costs and pay the penalty – that way the penalty doesn’t come “out of pocket”, so to speak.
It’s our job to do these calculations and present you with comparisons of the two scenarios to assist you in deciding which route to take.
Once we have arranged your refinance and your law firm presents you with your funds, it’s time to start planning. There are a lot of things about home renovations that can be intimidating – finding a reputable contractor, setting a realistic budget, even just finding a physical example of the idea that’s in your head.
HomeRenovationGuide.com can help with at least a few of those things. The Canadian, Rogers-owned site is designed for homeowners and contractors alike, to help them find information and resources for their next home project.
In addition to a useful blog, the site also has a vast array of helpful articles – and “how-to” videos – as well as a “tips from the pros” section, an inspiration section and an opportunity to share your renovation photos.
Another great tip is to check with a local real estate appraiser before you proceed with any major renovations. It’s important to understand how much value your renovations will actually add to your home. Some improvements add more value than others and if part of your motivation for your project is to increase your resale value, then consulting an appraiser first in order to make the most of your reno dollars is an invaluable step, especially in a slow or declining market.
So wipe the drool of your IKEA catalog and give us a call! It may be the perfect time for you to make your home improvement dreams come true and make that transition into another Alberta winter just a little easier!