Financing your spring projects

 

                  It's spring!

Thank goodness! Not that I don't enjoy a crisp winter day with the crunchy white stuff under foot but we didn't get much this year. Spring gets us thinking about all the projects around the house and or cottage we'd like to tackle. In my case I've been renovating my cottage for over ten years now. The question rises then "What can you do if you don't have the cash for your spring project"? Well if you have equity in your home you may qualify for a Home Equity Line of Credit offered by most lenders. This is a pre-qualified loan secured by the value of your home. The advantage is you only pay for what you use and assuming you qualify, it will be at a preferred rate compared to an unsecured line of credit. As well, you will have the benefit of interest only payments if you wish. A caution is in order here; You need to have the discipline to pay down the loan or you will be paying interest forever. Good for the bank but not for your pocketbook. I would also suggest that you stick to projects that will add to the value of your home or cottage (ie. don't go on vacation on your credit line). The new kitchen, bathroom, finished basement, landscaping, a deck. Take advantage of the government grants for energy saving projects check out www.ecoAction.gc.ca . There are up to $10,000 per home in grants available between the federal and provincial government. Everything from new toilets to a new furnace or upgraded insulation, all good projects for your home. You must have a home energy audit performed before going ahead with your project to qualify for the grants. Secured PCL's are good if you are doing improvements to your home before putting it up for sale, as there's no penalty for paying them off with the proceeds from the sale. Do get the approval in place before you have the For Sale sign put up on your lawn! The bank wants to think that this is a longer term arrangement. As a matter of fact if you are buying another home of similar value or greater they will no doubt offer to transfer your credit line to the new property. There are costs involved to put a secured credit line in place but lucky for you this is the time of year when most of the banks offer promotions where they take care of all or most of the costs involved such as appraisal and legal fees.

Leslie Weir

leslie.weir@century21.ca

markhamtownhome.com

 

 

 

Leslie Weir

Leslie Weir

Sales Representative
CENTURY 21 Leading Edge Realty Inc., Brokerage*
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