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Renovating a house or office is a pain. There’s no way around it. The space becomes a construction site, there’s a constant stream of workers entering and exiting and you will most likely experience at least one if not several delays.

In the long run, there’s a lot of benefit to undergoing a renovations project even if the short-term pain is significant.

Renovations can add a ton of Value to your Property

Just about any upgrade to your house can immediately increase its overall value, especially if it’s more than cosmetic. New appliances, floor or carpet refreshes or a room renovation that modernizes or makes it more functional are all investments that should provide a return when you sell.

Some Renovations are better than Others

If you want to feel the value that renovations can make to your home than focus on the kitchen. This is the room that can have the largest impact. Before demolition, do your research to find out which kitchen trends are popular.

Small Touches Can Transform a Space

Most people focus on the large overhauls for houses and offices but sometimes the lighter touches can be the most dramatic. Something as small as under cabinet lightning can make a big difference to a kitchen. Replacing laminate flooring with hardwood can completely change the atmosphere of a room. Get creative and consider millwork and finishes as much as the bigger items.

Focus on Modernity but There’s a Caveat…

The question to ask yourself when renovating is does this reflect modern tastes and sensibilities. Even if something is meant to be kitsch or retro it can still reflect what is on trend. While renovations today might look dated in 10 years, you should consider when you might sell and speak to contractors about how easy future updates might be.

Renovating takes a savvy mind and a lot of patience. If you can withstand the psychological trauma that might come with the experience, you could be find your pockets lined with a healthy return on your investment.

Home equity loans are simple yet are sometimes treated as complicated. It’s a type of loan that allows a person to borrow against the value of their home, and to take advantage of equity they’ve built up.

Most industry experts express that homeowners should take more advantage of home equity loans, believing it to be a viable treatment of their best asset.

Here’s some basics that are important for everyone to know.

Low Rates, Relatively Easy Approval and Potential Tax Benefits

Typically, with home equity loans you can receive a fair interest rate, especially when compared to other loans. While not guaranteed, most homeowners can get approved even if they have bad credit, because your home is strong collateral.

As well, interest on a home equity loan can potentially be tax deductible, but not in every case. This is one question you will want to ask your accountant.

Large Amounts for Borrowers and Secured Loans for Lenders

Home equity can help you access a large sum of money if you need to overcome financial difficulties. It can also help you pursue a business opportunity or to fund an education or deal with a medical emergency. These things cost money, sometimes more than you have liquid in savings.

These loans are secured loans because banks feel comfortable extending you a loan based on the equity in your home.

You can borrow with a Home Equity Loan in Two Ways

Borrowers have two options when they are approved for a home equity loan. They can receive a lump sum or it can be dispensed as a line of credit. With a line of credit the money will be made available and you only repay what you use.

The way you borrow effects the repayment plan and accrued interest.

Be Wise in how you Borrow when your Home is Involved

As with anything, there are some pitfalls with home equity loans. Since your home is involved you don’t want to borrow against it to travel or repay a credit card. It is best used in specific situations and can be incredibly beneficial in those circumstances.

Only a few months later and we’ve experienced a significant interest rate hike from the Bank of Canada. To compound matters, other lenders have followed their lead and increased their interest rates.

This hike should affect all loans and saving products sold by Canadian banks.

What Led to the Interest Rate Increase?

This was the first interest rate hike in years and the resulting fallout is complex with potentially major implications.

Part of the rate increase is due to a rebound in the economy. As oil prices rebound somewhat since its 2014 plunge and the housing market’s dip seems minimal, there are signs that the Canadian economy has bounced back from its recession.

These measures are also an attempt to curb the debt load of Canadians, to spur savings and to strengthen pensions. These all suffered when interest rates were low and people took advantage by loading up on debt.

Where are Interest Rates Headed?

As we’ve recently learned, these things are tough to predict even for financial experts. Remember, pundits called for rates to stabilize beyond 2018 but a hike hit Canadians in July 2017.

Mortgage rates might continue to climb throughout the rest of the year and into 2018 due to North America’s economic expansion. Desjardins Bank has suggested that the rate could reach 5% by 2019.

It might be best to lock into a fixed rate, if possible.

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What will Other Lenders Do?

This will most likely be a case of follow the leader. In fairness to lenders, they have also lowered rates in conjunction with the Bank of Canada when they were not required to. It would be surprising to see any lender not try to keep pace.

There’s no need to panic. As easily as rates could increase, they could also lower or stabilize. This is an opportunity to look for some value in the housing market or to save for longer or at better rates.

Having a mortgage means having options. As a mortgage approaches its expiration date, homeowners must decide whether they want to refinance their mortgage under new terms or renew under existing ones.

It’s important to know the difference between renewing and refinancing to determine the best course of action for your situation.

What is a mortgage renewal?

Renewing your mortgage is a straightforward process. If you owe money to the lender after your mortgage expires then you can simply opt to renew. Every term you negotiated and agreed to will remain in effect. All you have to do is sign on the dotted line.

What does it mean to refinance your mortgage?

If the idea of revamped mortgage terms appeal to you, then the option of refinancing is most likely a good fit. Refinancing allows you to gauge the different interest rates and amortization options that might be available to you.

Essentially, a refinanced mortgage is a completely different deal than your original mortgage. You don’t have to wait until the length of your mortgage expires. You can refinance at any time.

Refinancing can be appealing

Refinancing is a proven way to take advantage of lower interest rates. Refinancing can also be part of your strategy to pay off other debts, typically ones with higher interest rates like pay off credit cards debt.

A mortgage needs to fit into your finances and it doesn’t have to be a hindrance. One of the reasons a mortgage is fixed to a certain amount of years is to give both lenders and borrowers the flexibility to make it work.

A renewal date is an opportunity

As your renewal date approaches, you should audit your finances to review how they have changed from when you were first approved. If things are drastically different—you now earn more income, you have paid down a significant portion of your debt—than your mortgage should reflect that.

It’s all about securing the mortgage that is right for you. One that will help you maintain your lifestyle and pay off any necessary debts.