Are you looking to buy a house and make renovations to make it the home of your dreams? Look no further! The mortgage with renovation included is the perfect solution to finance both the acquisition of your new home and the improvements you want to make. In this blog, we’ll show you how these mortgages can simplify the process and optimize your investment, so you can have a personalized and cozy home.
What is a mortgage with renovation included?
Renovation mortgages are mortgage loans designed specifically for those who want to buy a home that needs improvements or renovations. These mortgages allow buyers to finance both the purchase of the property and the costs of the renovation, all in one loan. Instead of having to take out an additional personal loan or use savings to finance renovations, this type of mortgage offers a more convenient and accessible solution.
Requirements to be eligible for a mortgage with renovation included
First, a fundamental requirement to qualify for a mortgage with renovation included is to be in good financial health. Financial institutions will evaluate your ability to pay, analyzing your income, existing debts and credit score (representation of your credit history in numbers). Having a strong credit history and an adequate level of debt is essential to increase your chances of getting approved. Job stability is also an important factor in evaluating your application. Financial institutions prefer applicants who have been employed in the same job or in the same sector for a reasonable period of time.
On the other hand, you must also present a detailed budget for the renovations you want to carry out. This includes the estimated cost of materials, labor, and any other related expenses. Finally, it is very important to have all the legal documentation of the property in order and ensure that the proposed renovations comply with local building regulations and requirements. Make sure you have the appropriate permits and licenses to avoid legal problems in the future.
If you exceed these requirements, generally, the bank will grant you a loan of 80% that costs the purchase plus an extra 80% of the price of the renovation. The term is usually around 30 years and the average interest rate regularly ranges between 2 and 3%. However, remember that the stipulated conditions may vary depending on the financial institution and geographical location. It is best to consult directly with different entities or mortgage advisors to obtain accurate and up-to-date information.
Advantages of applying for a mortgage with renovation included
One of the biggest advantages of mortgages with renovation included is that they offer you comprehensive financing. Instead of having to look for different sources of financing for the purchase of the home and renovations, you can get a single loan that covers both aspects. This simplifies the process and saves you from having to deal with multiple applications and monthly payments. This way, it’s easier to manage your bankroll efficiently. You can access the necessary resources to cover the costs of the purchase and renovations without having to pay large sums of money immediately. In addition, you can structure payments according to the progress of the project, which gives you greater financial flexibility.
With regard to interest, financial institutions usually offer favourable conditions on mortgages with renovation included. You may be able to access lower interest rates compared to other personal loans or for renovations, especially if the renovation is to improve the energy efficiency of the home.
On the other hand, by financing renovations through the mortgage, you can make significant improvements to your home. Not only does this improve your quality of life, but it can also increase the value of the property on the market. Well-planned and executed improvements can make your home more attractive to potential buyers in the future, which can result in a higher return on your investment.
In addition, if your renovation aims to improve the energy efficiency of the home, you can get better financing terms or even a larger loan. So think about how to make your home greener and you could benefit big!
Renovation mortgages are a valuable option for those who want to buy a home that needs improvements. They allow you to finance both the purchase and the renovations in a single loan, simplifying the process and optimizing your investment. Consult with different financial institutions and mortgage advisors to find the best option that suits your needs and circumstances. Bring your renovation projects to life and create the home of your dreams!
Remember that, at Kaleidoscope, we are experts in comprehensive renovations and we can help you turn your new home into a truly personalized home. Do not hesitate to consult our free tool to obtain an estimate of the cost of your comprehensive renovation. We are here to accompany you every step of the way and make your dreams of transforming a house into your ideal home come true. In addition, in the economic field, we become your ideal travel companion, since financial institutions usually need to validate some of the procedures with the architecture expert to confirm that everything is well planned.
