Edmonton has a lot of older homes with underused lots and more homeowners are starting to see the potential. Whether it’s a garage suite, a basement suite, or a separate garden suite for adult children or rental income, the question usually comes down to one thing: how do you pay for or finance it?
Here are the two main options. Watch my video or read on for more details:
Garden Suite Option 1: Refinance and Pull Equity
If you’ve owned your home for a while, there’s a good chance you’ve built up meaningful equity. The simplest approach is to refinance your mortgage, pull that equity out as cash, and use it to fund the garden suite build directly.
This is the straightforward route. You know what you have to work with, you pay for the garden suite construction as it happens, and there’s no added complexity on the mortgage side. The main requirement is that you have enough equity in your current home to cover the cost of the project.
Garden Suite Option 2: Refinance Plus Improvements
The second option is called a refinance plus improvements. Instead of being based on what your home is worth today, this approach is based on the projected value of your home once the garden suite addition is complete.
That can allow you to borrow more, but it comes with more moving parts. There’s additional paperwork, the process takes longer, and the overall experience is more complicated for the homeowner. It can make sense in the right situation, but for most people the straightforward refinance is the easier path if the equity is there.
Is a Garden Suite Right for Your Home?
If you own an older Edmonton home and you’re thinking about adding a garden suite, the first step is understanding what your home is currently worth and how much equity you have available. From there, it’s a pretty easy conversation to figure out which route makes the most sense for your family.
Whether you are preparing to buy your first home or your fifth, if you’re looking to get pre-approved for a mortgage in Edmonton, fill out my online application. I’m here to help you every step of the way.
About Jason Scott, Edmonton Mortgage Broker
Looking for a personalized mortgage solution? As an Edmonton Mortgage Associate, I’m trusted partner who will help you get the right mortgage for your home or investment property. I’m Jason Scott, and I’ll be your Mortgage Broker in Edmonton.
