Purchase Plus Improvements

In this age of highly competitive real estate market, sometimes you just have to jump and offer on the next available decent house in your price range. However since the homes are going for well over asking price and sometimes with interiors that have not been touched since Justin Trudeau’s father was Prime Minster, a purchase plus improvement mortgage may be something that you want to consider.

With this mortgage program it allows you to purchase an as is home ( not one that is not livable) and make some improvement to make it your own. The improvements are limited to structural and permanent fixtures ( paint, flooring, cupboards, roofing or furnace / AC etc) rather than appliances.

Depending on the lender programs can be the purchase price of your home + up to 10% or 40K whichever is less or some lenders are now doing the purchase price + 20% of the purchase price as improvements.

Here is an example, you were the successful bider on a home that you are buying for 500K. You still have room in your debt service ratios and want to improve the house to make it your own. So depending on the lender in some cases you can add 40K in improvements and others you can go up to 100K.

Don’t forget that if your purchase required high ratio mortgage insurance (CMHC,Sagen or Canada Guaranty) your down payment will now change. You will need to put down 5% for for 1st 500K and 10% of the improved value. So that would be 25K on 500K and 4K for 40K or 10K more if you were getting 100K worth of work done.

“When you are good at something, you will tell everyone. When you are great at something, they will tell you.” Walter Payton

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here