How to get a home renovation loan with bad credit
Nothing is more refreshing than seeing your home get a modern makeover. Whether you moved into a house that needs some fixing up, your current home is starting to feel outdated, or you simply want a new look, a major renovation is a worthy investment. Renovations can go from minor ones like repainting walls to more large-scale ones like redesigning the kitchen and replacing the cabinets.
Home improvements, exciting as they are, are major expenses, and the costs can easily stack up. However, financing home renovations doesn’t have to be a major obstacle; with a home renovation loan through your home’s equity, you can reach your home renovation loan dreams.
The benefits of house renovations
Especially with an old house renovation, a full transformation is not only satisfying to see but can also be very beneficial to its residents. The following are just a handful of the potential benefits that home renovations have in store for you:
Raise property value
The main reason that people want to raise the value of their property is to sell it at a higher value than which they bought it. While you can do a custom home renovation at any point during your ownership, it’s better to do the renovations shortly before you sell. Modern designs and upgrades are more like to catch homebuyers’ attention.
Before you start construction, be aware of the changes that could potentially happen in your neighbourhood. Many areas are being redone to make room for high-rise buildings. If your current house is in one of these places, you wouldn’t want to start an improvement only for it to be destroyed soon after. However, if your house is an ideal location, close to schools and accessible by transit, a complete makeover would benefit you and anyone who owns the house after you.
Create the opportunity to rent
Some larger houses have a spacious lower floor that can be converted into an additional living space. In relation to raising the property value, if the quality of the renovation is high and more appealing to live in, you can set the rent higher. Even if there is a large initial cost at the start of the renovation, it will all be worth it when it turns into rental income, also giving you the opportunity to turn a bad credit score to good standing.
Save energy
Many homes still have appliances and fixtures from several decades ago. Replacing appliances with ones that are more modern allows you to save on energy because they are designed to be more efficient, all while going easy on electricity and water. You can even change the windows or add better insulation to the house to help you save on heating and air conditioning.
Make the home more functional
Whether you are selling, renting, or continuing to live in the house, creating a comfortable space has the next resident’s best interest in mind. Some major custom home renovations will include tearing down walls or replacing areas that aren’t as functional as before. Expanding rooms by rearranging the walls will make them more appealing and comfortable. Alternatively, you could add smart systems so that you can control everything from a smartphone. Changing this will add a layer of comfort, allowing you to enjoy your home more than before.
Have fun
For some, renovating a house can also feel like a rewarding and creative project. It provides a sense of accomplishment after working day after day and seeing the house slowly transform. Especially if you’re a handy person, you may enjoy doing some of the upgrades yourself.
The cost of renovating a house
Depending on what you would like to change, the price will vary according to the materials you buy and to what extent you renovate the house. The overall charge may be as little as $500 or may reach as much as $1-2 Million. Replacing the stove or painting the walls are examples of minor but effective changes, while full kitchen and bathroom makeovers are bigger projects that come at a higher cost.
When it comes to calculating the cost of your renovation, it’s important to know where you should and shouldn’t be economical. For example, lower cost paints probably won’t make a noticeable difference on your walls, but it may be better to invest in sturdier floor tiles rather than vinyl glued to the sub-floor.
The building materials alone aren’t the only expense that you have. Especially for full scale renovations, hiring a contractor is the safest and quickest way to realize your visions for the house. However, their time and expertise is valuable and should be compensated appropriately. Do keep in mind that a large portion of the expense is the hired labour, but you may reduce the overall cost by shouldering some of the work yourself.
Covering the expenses
The amount that you need to renovate depends on what you decide you want changed. A paint job could cost a couple hundred dollars, whereas a complete kitchen and bathroom makeover could reach tens of thousands of dollars. To cover these costs, you have a couple of options:
- Using your savings
If you have accumulated a substantial amount of money over the years, breaking the piggy bank is one strategy. Assembling such a sum of money also takes time, so starting your savings late into your ownership puts you at a disadvantage. taking money from your savings account isn’t always the most ideal option, especially for such a significant investment.
- Getting a home renovation loan
The second option you have is to get a home renovation loan through the bank, but they typically have stringent standards that many people are unable to meet. For one, the minimum credit score needed for large loans is about 660, but the ideal score to have is 700. They may also analyze your credit history and income to verify your creditworthiness. So then, in order to get a loan for renovating, your financial record will have to be stellar, and for someone to get a loan with bad credit, it may have some obstacles.
If you find that the bank has turned you away and you would prefer not to tap into your savings, your goals do not have to end. With the right alternative lender, renovating your house is still attainable for any regular homeowner.
Renovating your home with loans from Alpine Credits
Finding the funds for your home improvement doesn’t have to be a challenge for homeowners such as yourself. With Alpine Credits, you can access a loan through your home equity. A home equity loan can equal up to 80% of your houses’ value. Especially with Canada’s rising housing market, the amount could be very large. Regardless of a bad credit score or your income, you can get your home equity loan approved with us!
Contact one of our Financial Solution Specialists to discuss a home equity loan. It’s free of obligations and they are able to answer any question that you might have regarding loans and home equity. A home equity with Alpine Credits is your opportunity to fund your renovation goals and realize your dream house.