There comes a time in every home or cottage’s life when a good renovation will do wonders for its function, curb appeal, and overall value.
In most cases, the owners choose to borrow the funds to do the work as they know the ROI will be worth it. This often requires a bit of refinancing and, when dealing with multi-million-dollar properties, a significant construction loan.
Finding the right mix of financing is key in these situations, explains mortgage broker Drew Donaldson.
He and the Donaldson Capital team are experts in developing strategies that maximize the benefits of mortgage financing for their clients.
To illustrate the process, Drew points to a financing they recently arranged in one of Toronto’s best neighbourhoods. “The appraised value was $10.2M and we lined up a $4.8M first mortgage with a $1.2M construction loan in second position.”
In six to 12 months, when the renovation is complete, one of two things will happen: either the mortgage and the construction loan will be consolidated and the property refinanced, or the construction loan will be paid off completely, leaving just the standard home mortgage.
It’s helpful that this client has a plan to reduce the debt and pay off the second mortgage should it be necessary.
“Exit strategies are of the utmost importance,” says Drew. “In this case, the client is anticipating a liquidity event which will provide ample capital to pay off the second mortgage if they so choose.”
Liquidity events refer to financial cash boosts such as an employment bonus, inheritance, sale of a business or property, and other similar situations.
Donaldson Capital’s team includes an array of diligent people who can help clients in any mortgage financing situation.
“Every client is cared for by three highly passionate, customer-centric individuals who help complete their mortgage transaction in the most efficient way possible,” says Drew.
The team is well-versed in a broad range of areas, including navigating multi-million-dollar residential mortgages for high-net-worth clients, securing construction financing, and finding flexible forms of capital to help clients grow their wealth.
“The Donaldson Difference, which separates us from any other mortgage company in the industry, is built on four core strengths: key relationships with lenders, market experience in Toronto and Muskoka, our own personal experience, and our devoted team.”
TEXT CHRIS OCCHIUZZI | PHOTOS SCOTT TURNBULL