Harpreet’s perspective
Real questions. Real properties. Real numbers.
You have the Pinterest board. The contractor has visited. The kitchen you've hated for seven years is finally about to meet its destiny. Then comes the small question: ‘How are we paying for this?’
Depending on your equity and qualification, refinancing or other borrowing options may be worth exploring. But before discussing financing, show me the project.
What Are You Creating?
Is this a $30,000 cosmetic renovation? A $150,000 major remodel? An addition? A secondary suite? Are we improving the home for your family, increasing rental potential or trying to add value before selling? The purpose matters.
Count the Cost of Borrowing
Then we look at the cost of borrowing. Would refinancing trigger a mortgage penalty? What would the new payment look like? How much equity would remain afterward? Are we comfortable with the additional debt?
Know What Kind of Investment It Is
And if you're renovating primarily to increase value, let's be realistic. Spending $100,000 doesn't automatically add $100,000 to the property value. Sometimes renovations are financial investments. Sometimes they're lifestyle investments. Both can be perfectly reasonable. Just know which one you're making.