The economy may look grim, but your house doesn’t have to.
Home renovations are a great way to perk up your life and your investment.
These days, financing a fixer-upper doesn’t have to break the bank. With the new Home Renovation Tax Credit (HRTC) already cutting costs, banks are also out to help. “The best advice would be to sit down with a mortgage specialist and make an informed decision based on facts,” says John Turner, director of mortgage sales at the Bank of Montreal.
BMO’s combination of a mortgage and line of credit is one the more popular options lately, says Turner. “The Homeowner ReadiLine lets you keep your mortgage portion under a mortgage and also have a line of credit portion to use for renovations. It’s all under one borrowing limit … As you pay down your mortgage, you increase your borrowing reserve. The interest rates are great and you only pay interest on what you use.”
But use it wisely. “You’ve got to look at the return on the investment,” says Mag Ruffman, Road to Avonlea’s Olivia Dale turned toolgirl of toolgirl.com. “Kitchens, bathrooms and basements are three places in the house that make the most impact in the resale of a house.”
Saving money while adding value comes down to education and materials, according to Ruffman. “Learn how to do things yourself.” For the civic-minded, Ruffman recommends volunteering for Habitat for Humanity. “It’s an amazing experience and you get to understand what goes in to the systems of a house.”
Next to know-how is “know-where.”
“When it comes to materials, you can save a lot of money by going to used building supply places,” says Ruffman. “Habitat for Humanity runs one called ReStores. They’re outstanding for value. All big cities have at least one.”
But major retailers are also out to add value. The Home Depot’s Top Up program ran last month allowing customers to receive 10 per cent back in gift cards on HRTC-eligible products between $1,000 and $10,000.
They plan to run similar promotions focusing on key seasonal categories throughout the year.
“It’s a great incentive to get people into the stores and working on renovations,” says Frank Turco, colour, trend and design manager at The Home Depot. “Obviously, it benefits us from a revenue standpoint, but in turn [it] benefits the consumers who can actually start to do some work even though we’re faced with recessionary times.”