Home renovations made simple
When you first bought or built your property it was a bit of a fixer-upper, but you probably thought that it would be easy to renovate later on.
But time passed and you still haven’t started updating your home. Now, the outdated stove only has two burners that work, the roof leaks when it rains, and it’s starting to feel like the pink bathroom fixtures are taunting you.
Maybe the delay is about finances? You intended to put money aside for the renovation but then life happened. Life is expensive. That’s why it’s critical to use your money wisely when renovating and find the best way to finance your renovation.
Here are four renovations you should prioritize and four ways to pay for them.
Renovations That Can Add Value
1. Fix What’s Broken
The first priority when renovating should be to protect your investment. If the roof is leaking and threatening to turn your house into a moldy, water stained disaster, it’s time for a new roof. If appliances don’t work or if your air conditioner is blowing hot air, it’s time replace them.
Many older homes in the Caribbean still have louvered windows. Installing energy efficient windows can help you save money on keeping your home cool, and may offer better protection against hurricanes. Some experts also recommend that you tint windows if your home is facing west to help keep it cooler.
3. Update Fixtures and Walls
Renovations don’t have to cost an arm and a leg to add value. Simply updating wall colours can make a huge difference and be cost-effective. So can modernizing light fixtures, door handles, moldings and trims.
4. Kitchens and Bathrooms
Kitchens and bathrooms are places where we spend a lot of time and so it makes sense why experts say updating them has a huge impact on your enjoyment of your home — and on it’s value. If you want a new look for less, look into changing cabinets facings or pulls rather than gutting everything. But if it’s in your budget, most designers agree that money spent renovating your kitchen is money well-spent.
Ways to Finance Your Renovation
1. Use Your Savings
Dipping into your savings can be a great way to pay for renovations – but not everyone has enough money sitting around in a rainy day fund to pay for a major overhaul. Also, you might not want to deplete your emergency fund – after all, you never know when you’ll need it.
2. Take Out a Consumer Loan
If you’re financing a smaller renovation, a consumer loan might be a good option. But interest rates on consumer loans can be higher than other financing options.
3. Get a Home Equity Loan
If you have equity in your home, then a home equity loan could be a great option. Basically, they allow the value of your existing property to work for you and offer low rates because they are secured loans. You can take one out on your Caribbean property or on another property you own to finance your renovation.
4. Refinance Your Mortgage
If you bought or built your home years ago, it might have appreciated in value significantly. You can access that additional value by refinancing your mortgage. So long as you leave 20% of equity in your home, you can get cash back equivalent to the difference of your home’s current value and your original mortgage amount.
Do you have an idea of the type and cost of renovation you wish to undertake? Chat with an RBC Mortgage Specialist and find out what’s the best home renovation loan for you.
Calculate the cost of your home renovation project with our cost estimator
This article offers general information only and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While the information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or its affiliates.