Real Estate

Renovation Financing

  • Last Updated:
  • Aug 22nd, 2019 12:54 pm
[OP]
Newbie
Sep 7, 2011
2 posts
TORONTO

Renovation Financing

Looking at a potential reno DT Toronto.

Lets say I need $500K for the full reno. Home is $1.8M. I put 20% down. No other personal cash for this project.

What are my options for the $500K for renos? Second mortgage and then refinance upon completion at the newer value and pay off the second?


IS it worth it for those experienced to absorb the fees of a second mortgage and or/ private second for a reno?

Anyone care to share experience or solutions they have done, on raising capital for a reno?
2 replies
Deal Addict
Jan 13, 2014
1770 posts
709 upvotes
Calgary
Here is my question, would the reno add 500k in value as well? you can do a mortgage same term blend where you simply add the reno cost to the existing mortgage pending appraisal from the bank. If the reno cost is justifiable to the bank and the value of increase is reflected in the appraisal (you need to provide proper invoice and breakdowns showing whats being done) then yes the bank would get this done for you at a minimum cost (appraisal and legal fees cost).
Deal Guru
User avatar
Mar 23, 2008
12428 posts
8938 upvotes
Edmonton
My advise is the same as I regularly give... You need to sit down and talk to a mortgage broker and go over your actual numbers.

My concern with what you’ve spelled out here is that you’re not going to get a second mortgage if you’ve only put down 20%. There’s not enough equity left to protect any other lender. But it doesn’t hurt to ask around.

C

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