A construction loan is a specialised type of mortgage designed to fund the construction of a new property or the major renovation of an existing one. Unlike traditional mortgages, where the entire loan amount is disbursed upfront, a construction loan provides funds in stages as construction progresses.
There may be several ways to finance your renovation project, depending on your needs and the scale of the project:
Home equity loan: Borrow against the current value of your home, usually up to 80% of its value, before any renovations.
Construction loan: Like a home equity loan but considers the final value of your home after renovations.
Line of credit: Ideal for ongoing or long-term renovations, offering a revolving credit line with interest paid only on the funds used.
Homeowner mortgage: Spread renovation costs over an extended period, suitable for major transformations.
Personal loan: Suited for minor renovations, typically capped around $30,000, but with higher interest rates than home equity loans.
For more details and personalised loan advice, contact us here.
