Your Mortgage Financing Can Support Your Home Renovation
Older homes can have a lot going for them: established neighbourhoods and classic charm come to mind. However, they can also require extra maintenance to keep them in good condition; and if you decide to renovate, you never know what you might find.
Liam is a pensioner, and his home suits his lifestyle perfectly. It's close to many amenities and is the right size for him. Unfortunately, Liam's financial transition to retirement was not smooth and led to building up some debt as well as letting the maintenance of his house slide. Several rooms were in need of major repairs, and while he'd started renovations in some areas the money to complete the work was not readily available.
Liam was considering filing for bankruptcy when he was referred to Auxilium. He had recently renewed his first mortgage, but he was unable to refinance with that lender to pay out his debts and leverage the equity in his home to complete the renovations and repairs. He needed a solution that would get him – and his home – back on the right track and enjoying retirement.
Our team explored several options for Liam. Due to the extensive nature of the work required on his home, we settled on a short-term private second mortgage to free up the funds to complete the renovation plus paying out Liam's debts so that he could start repairing his credit. Estimates and timelines from a contractor were required up-front, as was a property appraisal to ensure that the completed value of the property would support the loan. We assisted Liam with that process and kept in touch along the way to make sure everything was progressing as expected.
Once the renovations were complete, a second appraisal was obtained to support his file with a B-lender. Not much time had passed since Liam's debts were paid out, so his credit score had not yet improved to qualify with an A-lender. However, this next step reduced the interest rate Liam is paying for his mortgage and will allow him to continue rebuilding his credit to renew with an A-lender in a year.
Now that he doesn't have to worry about debt sapping his monthly cash flow Liam is able to budget for the ongoing maintenance an older home requires. He's also able to fully enjoy his property in the neighbourhood he loves.