TWT Recently funded a credit facility to help renovate our clients kitchen, main floor and primary restroom, add a 3 season room and landscape.
Our clients approached us to pre qualify them for a new home. After months of searching the market they could not find the right property and decided they were living in it, assuming they could come up with the financing to support a large renovation.
Like a lot of Canadian's their mortgage is being paid down and their value has been going up with the difference becoming their equity. We can lend up to 80% of the home value in most cases. The amount one can access is 80% of the home value, minus the existing balance on their mortgage. In this case, that is a $2M property value, 80% is $1.6M and existing mortgage is $400k, allowing up to $1.2M to go towards their home renovation in the form of a mortgage of line of credit.
In circumstances in which we are reliant on the homes future value, we start to consider products like purchase plus improvement if renovation is taking place shortly after the purchase or a construction facility in which we lend against the future value.