Mortgages With Renovations : Purchase Plus Improvement Mortgages
Perhaps you’ve found the right home in the right location, but it needs a little improvement. It’s one thing to come up with the money for a down payment, but it’s another to have to foot that home improvement bill yourself. So keep reading if you’re looking for an affordable way to acquire a home and fix it up at the same time.
There is a little known program that you might be able to take advantage of, which could increase your chances of finding a home – especially if you may not have the money to buy a “fixer upper”. With it, you may be able to purchase a home that otherwise may have been overlooked, due to the fact that it was in need of some renovations/updates. Whether it’s a new kitchen, bathroom, windows, flooring, etc. this program gives you the flexibility to purchase a home and include the cost of renovations in your purchase.
The Purchase plus Improvements mortgage gives qualified buyers the ability to borrow up to 10 per cent of the as-improved value of a home OR up to $40,000 to put towards the cost of renovations and include it in their mortgage loan amount.
But how does it work? Borrowers must provide a quote from a contractor which is then submitted to both the mortgage lender and the mortgage insurer for approval The contractor will provide a quote that breaks down the scope of work and the costs associated with it. Once both the Mortgage Insuerer and the lender approve the improvement amount, it is added to the mortgage loan.
On closing day, the improvement amount is advanced to your lawyer, who will hold onto it until the renovations are complete – this means that you don’t actually get the money until the work is done, so it might be a good idea to secure access to an unsecured line of credit so that the initial deposits/costs can be paid and work can begin. When the renovation is complete, the lender sends an appraiser to your home, to confirm that the scope of the work outlined on your quote is done.Once confirmed, the lender will authorize your lawyer to release the improvement amount to you.
The important feature of the mortgage is the incredible rate! You will get the lowest discounted rate for the term of your mortgage. This is a huge advantage over regular home renovation loans.
Does it sounds to good to be true? There is one major thing to keep in mind: borrowers cannot include the costs of appliances in their quote, as they are not part of the physical structure and could be taken out if you ever decided to sell.
Ready to explore your options? Just give us a call at 647-893-2535 to get started!
REFINANCE YOUR MORTGAGE TO INCLUDE RENOVATIONS:
If you currently own your home and you would like to undertake some renovations, you can still take advantage of the this mortgage product. We have lenders that would allow you to refinance your current mortgage and still add up to $40,000 or 10% of "as-improved" value to the mortgage amount. It is perfect way to finish those small and big renovations and updates on your never ending TO DO list. Get started by calling us at 647-893-2535
Information provided by Snezhana Todorova, Mortgage Agent, Lic #M13000122. Dominion Lending Centres Mortgage Watch Lic#12044.
Snezhana can be reached at 647-893-2535 or firstname.lastname@example.org