What Are Your Options for Home Renovation Loans?

Renovations improve the appearance of your home, making it more desirable to live in. A home renovation also increases the resale value and equity in your home. However, renovations may cost thousands of dollars. A home renovation loan can help cover the expenses.

Types of Home Renovation Loans

1. Loans

You can use the equity in your home as collateral to secure your home renovation loan. Refinancing your mortgage can allow you to access the funds needed for your home renovation project. Loans also provide flexible fixed and adjustable interest rates. You and your lender can agree on a convenient loan repayment plan.

2. Line of Credit

A line of credit is similar to having a credit card. Once you have access to the funds, you do not have to reapply each time you need to use them. For this reason, a personal line of credit is convenient for ongoing home renovations.

You can use your home as collateral to secure a line of credit (HELOC) and lower your interest rate. This is done by refinancing your existing mortgage. Contact a broker to see if this is an option for you.

Maximizing Your Loan

Renovating your home should boost your home’s resale value. Different renovation will give you different bang for your buck. Consider the following improvements to your home to increase your comfort and the home’s value.

• Update The Bathrooms: Remodeled bathrooms can give 56% higher return on investment than other renovations. Give your bathrooms new contemporary fixtures, additional cabinet space, mirrors, low flush toilets, fresh paint, and new tiles.
• Expand the Kitchen: If you have a small kitchen, open it up to give it more space. Invest in new cabinets and update the appliances. Ensure the new layout makes the kitchen more efficient. The return on investment from a kitchen renovation is 44% higher than average home improvements.
• Replace Your Floors: New flooring is a significant selling point for homes. Choose a colour and style that can brighten up your living space, but is also durable

Other renovations can also add value to your home, including a fresh coat of paint.

Applying for a Home Renovation Loan

Renovating your home will improve its curb appeal and increase its value. If you are looking for home renovation loans in Edmonton, contact me!

What Questions Should You Be Asking When Trying to Secure Your First Mortgage

Securing a mortgage is a big decision that can have lasting economic consequences in your life. You should take the time to understand the intricacies involved before signing the loan contract. Before taking out your first mortgage in Edmonton, ask for advice from a seasoned mortgage broker.

But finding a mortgage company is not enough. It’s essential to arm yourself with the right questions to make the best out of the discussion with your broker. If you are looking to secure your first mortgage, seek answers to the following questions.

How Does the Mortgage Application Process Work?

As a new homebuyer, the details inherent to securing your first mortgage and using it to purchase a property may be perplexing. Your mortgage broker should elaborate on the legal and administrative procedures that you’ll need to follow. Understanding the process will help you to think through your current financial responsibilities and plan.

Which is the Best Type of Loan for Me?

Some mortgage lenders will give a loan without explaining why they think it suits you. Before accepting any offers, ask your mortgage broker to enlighten you on all the available mortgage options in depth. They should explain the pros and cons of each and clarify why they think a particular option is better than others.

For instance, taking a fixed-rate loan means your interest will never change. Conversely, the rate for an adjustable-rate mortgage will fluctuate depending on the market. Your lender or mortgage broker should explain what these differences imply.

How Much Down Payment Should I Have Saved?

The minimum down payment in Canada is 5%. If you have 20% down payment buyers can avoid default insurance (CMHC). Upon qualification the down payment can be your own savings, gifted, or it can be borrowed. Contact me to see if you qualify for these options.

Default insurance is required in Canada when you have less than 20% down payment. This is a premium paid on your mortgage amount which is included in your monthly payments.

How Much Are the Total Costs?

On top of your down payment there a few extra costs you need to budget for. Some areas that your mortgage broker should highlight include appraisals, inspection reports, and property taxes, among others. Ask for an estimate of all costs before applying for the loan.

Can I Lock in a Rate?

A rate hold is an agreement between a mortgage lender and a borrower to keep the interest rate held for up to 120 days. This period may be between the date of mortgage approval and the possession of the property.

Rate holds are beneficial when interest rates are rising. Rate holds protect the borrower from mortgage rates increasing when they are out shopping for a property. If interest rates decrease within that time frame borrowers will receive the lower rate.

How Long Will It Take to Get Approved?

Banks may have different loan processing timelines depending on various factors. Talk to your broker about appropriate timeline for when you make an offer on a house. Being as prepared as possible will help speed up the process.

Securing Your First Mortgage Edmonton

Acquiring a home can be confusing if you aren’t familiar with the process.

Before applying for your first mortgage in the Edmonton area, don’t hesitate to consult Jamie Arthurs Mortgages. I have been supporting homebuyers in Alberta with professional advice and mortgage services since 2008.

Refinancing your mortgage means paying off your existing loan and replacing with a new one. There are several reasons why you can decide to refinance your loan. You can obtain lower interest rates, access the equity in your home, consolidate debt, or change your terms.

Why Should You Choose Mortgage Refinancing?

1. To Obtain a Lower Interest Rate

One of the benefits of mortgage refinancing is access to lower interest rates. As you continue to work and pay your bills on time, you improve your credit score. A higher credit score gives you access to lower interest rates, which helps you reduce your monthly payments. It is advisable to refinance your mortgage if you can reduce your interest rate significantly. A lower interest rate will help you save money and increase the pace at which you grow the equity in your home. A mortgage broker will help you determine if it is a suitable option.

2. To Change your Mortgage Terms

Mortgage refinancing is an option to renegotiate your mortgage terms. For example, changing from a fixed rate to a variable rate, or changing your amortization can reduce payments and help you achieve your financial goals faster.

3. To Access the Equity in Your Home

Many homeowners in Edmonton choose mortgage refinancing to access equity in their homes. In this case, you can refinance if you want to pay off debt, cover your child’s education costs or remodel your home and more.

4. To Consolidate Debt

If you have enough equity in your home, you can consolidate your debt through a variety of refinancing methods. The debts may include car loans, credit lines, or credit card debts. Debt consolidation helps you replace high-interest debt with a lower interest mortgage. One monthly payment is more manageable than many.

Cost of Mortgage Refinancing

There are costs associated with refinancing your mortgage. They can include, penalties, legal fees, appraisals, etc. Talk to your broker about these costs.

Mortgage Refinancing in Edmonton

Refinancing can be beneficial. However, it is not for everybody. Jamie Arthurs Mortgages can help you find the best mortgage refinancing options in Edmonton.

Things to Avoid When Buying Your First Home

The idea of owning a home (a place that’s yours, where your kids can grow up and make lifelong memories) is alluring to most people. This is why buying your first home is one of the most exciting and important investments of your life. Contact Me today for help starting your home buying process.

Buying your first home comes with a tremendous sense of achievement. More importantly, it is a long-term investment for your family. This is why it is vital to get value for the money you pay.

The home buying process is long and comes with several challenges, which can make it very stressful. As a result, many first time home buyers make grave mistakes as they skip critical steps in the process, such as:

1. Not Setting a Budget

Buying a home is a significant financial investment that will commit a portion of your income for years to come. Therefore, the key to success when buying your first home is creating a sound financial plan.

Begin by determining what type of house you want and how much you can afford to spend upfront and monthly on the purchase. As you determine how much you can afford, consider your ability to meet future financial obligations. By taking all these factors into account, you will be able to set a budget suitable for your present and future needs.

2. Failing to Seek Pre-Approval

It’s very disheartening for homebuyers when they think they’ve found their dream house, only for mortgage lenders to give you approval for less than what the house is worth. This is why it is wise to get pre-approved for a mortgage before you begin house hunting.

By doing so, you will know the specific amount you qualify for, thus avoid looking at houses beyond your range. However, make sure to stick to the budget you set even if your mortgage lender pre-approves you for more.

3. Not Working with a Mortgage Broker

A mortgage broker has access to mortgage products from a variety of banks and lenders. Their job is to find you a mortgage with the best rate and terms for your needs and you don’t even pay them! Working with a broker prevents you from choosing a mortgage with a high rate or having to shop around yourself. When buying your first home, you won’t want to miss out on the mortgage broker experience. Not only will you get the best mortgage available to you, but you will get expert advice and guidance from years of experience in the industry.

3. Shopping Alone

Though it’s possible to do a house search on your own, working with a real estate agent has its perks! If you don’t have your own realtor, you will be shown houses by the listing agent. These agents have the seller’s interests at heart, not yours. Your realtor is on your team! They also get the majority of their new business from referrals from previous clients, so they are going to do everything they can to give you a good experience.

It is important to know that real estate agents are paid by the seller, not by the buyer so they are an absolutely free resource to you.

5. Putting All Your Focus on the House

As much as you’re buying a house, you are also investing in the neighborhood and your future. Even if the house has all the features you like and seems perfect, it won’t be suitable if it’s in a neighborhood that does not suit your lifestyle or if you cannot afford the payments.

Get Started on the Path to Buying Your First Home

A mortgage is a long-term financial commitment. As such, it is important to get a lender with the best rate and terms. This is often easier said than done.

This is where I come in!  I give you access to a plethora of mortgage products and facilitate mortgages all over Canada. Contact us  today to make the process of buying your first home a breeze.