The Canadian Government’s 2009 Renovation Tax Credit may have long expired, but there are still plenty of benefits to renovating your home. Get off to a good start by having the right financing in place, and understanding which projects will add the most value.
One of the most important steps in planning a renovation is to establish a realistic budget. Once you have an estimate of your costs, add an extra 10-15% as a contingency to cover any unforeseen overages. With a clear budget in place, you can confidently begin to review financing options.
More borrowing power at a lower interest rate
With your mortgage lender you can finance your renovation with the equity you have built up in your home. As with any renovation project, delays and added expenses can quickly throw a budget off course, but with a secured line of credit, you know you’re getting a competitive rate, and your funds will be available when you need them.
Customized lending solutions
Depending on the size of your renovation, you may wish to go with either a personal loan or an unsecured line of credit. A personnel loan offers structured payments over a specified term, so you will always know how much you need to pay out each month. Alternatively, a Line of Credit will give you the flexibility to access funds at a moment’s notice, paying interest only on the amount you use.
Getting more value for your renovation dollar
While you are still in the planning stage, be sure to review the renovations that will give you the biggest return on investment.
Renovations that can add more value to your home:
- Improving the kitchen
- Adding or remodeling a bathroom
- Creating a master bedroom with an en suite bath and/or walk-in closet
- Adding a family room, especially on the main floor
- Creating a sun room
Renovations that can be value-neutral to your home:
- Adding a swimming pool, sauna or hot tub
- Installing a central vacuum system
- Reducing the number of bedrooms
- Installing paving stones in the driveway
Energy saving upgrades
Energy saving improvements can also add significant value to your home, while potentially saving you thousands on utility bills. Here are some common improvements that can lead to considerable savings:
- Upgrade your furnace and water heater
- Insulate hot water heater and pipes
- Replace windows
- Add wall insulation
- Add ceiling insulation
- Insulate and draft proof foundation
- Install a ceiling fan and window coverings
- Install faucet aerators, low-flow showerheads and toilets
- Install a programmable thermostat