What is it? (plain English)
A renovation loan lets you finance a home's purchase (or a refinance) plus the cost of improvements in a single loan, based on what the property will be worth once the work is complete — rather than its current, as-is condition.
Who is it for?
Buyers of homes that need work, and owners who want to upgrade without taking out a separate loan for the project.
When might it make sense?
When the right home needs repairs or updates, or when you'd rather roll improvement costs into one loan than juggle a mortgage plus separate financing for the work.
Good to know
These loans involve more moving parts than a standard mortgage — typically a defined scope of work, a budget, licensed contractors, and funds released in stages as the work is verified. Expect a longer, more documented process.
Potential advantages
One loan for the home and the improvements; financing based on the improved value; lets you buy properties a standard loan won't finance as-is.
Potential limitations
More paperwork and a longer timeline; contractor and draw requirements; the work has to be planned and documented up front.
Documents you may need
Identification, income documents, a contractor scope and budget, and the usual mortgage documentation.
Questions to ask before you choose
- What's the full scope and budget, with a contingency?
- Do I have a licensed contractor?
- What will the home be worth once complete?
- Am I prepared for a staged, documented process?
How Kyon helps
We help you understand how renovation financing is structured, what the draw process requires, and how it compares to buying move-in-ready — then connect you with the right licensed channel.