advice

Financing a Renovation

Dreaming about a home renovation project? There are financing options available to turn that dream into a reality.

Getting Started with Home Renovations

Home renovations are a great way to make your living space more comfortable while also increasing your home’s value. Before you get started, it’s time to think about how you’ll finance your home renovation. There are a number of financing options available for home remodeling at Libro. Explore your options and contact a Coach to determine the best path forward.

The planning stage

Once you’ve decided on a home renovation project, you need to decide if you want to do it yourself or hire a professional. When considering a professional, keep the following in mind:

For simple projects involving only one area, a specialized contract installer (for roofing or windows for example) may be the best choice.
If the project involves changes to your heating, electrical, or plumbing, you should consult a licensed trade contractor.
For renovation projects involving more than one trade or requiring structural changes, look for a general renovation contractor who can manage all aspects of the work.

Financing options for your renovation

Once you determine your budget and your estimated expenses, Libro can provide the advice you need to decide how best to finance your home renovations.

Installment Loan or Personal Line of Credit

For smaller projects that you can repay in three to five years, consider a loan with a regular repayment schedule. If funds are required as the reno project moves along, a line of credit allows you to pay only on the funds used and make flexible, irregular payments along the way.

Mortgage

For major home remodeling projects, a mortgage will give you peace of mind, a fixed interest rate, and a structured repayment schedule. Libro can help you access up to 80% of your home’s current worth, and with an updated appraisal of the “as-completed” value, we may offer construction advances as the work is done.

 

Financing your renovation with a home equity line of credit

For large renovation projects you want to pay for over a longer period of time, using your home’s equity is a great option. The lowest cost of borrowing you have available can be accessed through a MeritLine, Libro’s home equity line of credit.

  • Uses up to 65% of your home equity
  • Balance can be paid down and reused again
  • Only pay for what you use, when you need it
See The Benefits of HELOCs

Hiring a contractor for renovating

The best tip for hiring a contractor for your home renovation or remodeling project is to get a contract in writing. A proper contract describes the job, when it will be completed, and how much it will cost. Without a contract, you have no protection from overcharging, incomplete or faulty work, inferior materials, or excessive delays. Good contractors have satisfied customers and are proud to give you references. Take the time to call! Beware of a contractor who is unwilling to provide references.

Frequently Asked Questions on Financing a Renovation

What should a contract for home renovations include?

Your contract should include proof of the renovator’s insurance coverage and liability insurance. It should also include payment holdbacks in accordance with provincial lien regulations. The contract is your protection against workers’ accidents or injuries, damage to your property (or neighbors’ property), liens from unpaid trades, violations of the building code and undocumented price increases.

What is a home equity line of credit?

A home equity line of credit, also called a HELOC, is a secured form of revolving credit. The lender uses your home as a guarantee that you’ll pay back the money you borrow. As a revolving form of credit, you can borrow money, pay it back, and borrow it again, up to a maximum credit limit.

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