Mortgage for Fixer Uppers
You are considering buying a home that needs some work but aren’t sure how to pay for those improvements? Don’t worry, a mortgage broker can help you get the necessary funding, even with as little as 5% down!
Obtaining a Purchase Plus Improvements mortgage can help you get a mortgage, and the costs for improvements, all in one product and only one monthly payment!
So what is the Purchase Plus Improvements program, and how does it work?
- 1. First and most important, you need to get a pre-approval from your mortgage broker to determine your max mortgage amount.
- 2. Find the home you want to purchase, and get a general idea of what improvements need to be done, and how much they may cost. (NOTE: The Purchase price and improvement costs cannot exceed your pre-approved amount).
- 3. Once your offer for purchase has been accepted, you must submit your Purchase agreement as well as formal contractor supplied quotes for the improvements that are to be done to your broker for submission to the lender.
- • Purchase Price – $350,000
- • Improvement Price – $35,000
- • Revised Purchase Price – $385,000
- • Mortgage Amount – $380,380 [Minus required min 5% down payment($19,250), plus CMHC Insurance Cost ($14,630)].
- 4. On Closing day, you can begin your improvements immediately. The Solicitor involved in your transaction, will have been informed by the lender to hold the additional funds for improvements until the lender confirms the work has been completed to their satisfaction.
- 5. When the lender has received the final inspection report from the appraiser validating the work has been completed in a good manner and as per the quote originally provided, the solicitor will be instructed to release the funds to you in full in order to pay the contractor(s).
So if you are thinking of buying a “fixer-upper” contact me any time to discuss the Purchase Plus Improvements program or any other option that may be available to you!
If you have any questions, or want to find out what mortgage amount you qualify for based on today’s guidelines and rates, please feel free to contact me any time.