Finding the right home to meet both your needs and your budget is not always an easy task.
You may find a house with the perfect layout on a great piece of property in your ideal neighbourhood, but the interior needs some major upgrades before it’s fully functional for you and your family.
Fortunately, there are mortgage products available that allow you to add renovation funds to your mortgage amount. With a Purchase Plus Improvements mortgage, you can buy a home, renovate it the way you like and pay for it all in one mortgage payment with as little as a 5% down payment.
How big are your renos?
There are two options available for this product depending on how much money you require for renovations.
First, if you need $10,000 or less, with a 5% down payment you may qualify for fully-discounted mortgage rates. For example, a $300,000 purchase would require $15,000 (5%) for the down payment if you need $10,000 or less for renovations.
Second, if you require more than $10,000, you must have a 5% down payment based on the improved value of the property, and the interest rate will typically be the lender’s posted rate minus 1%.
For instance, if you purchase a $300,000 home and want $50,000 for renovations, you need 5% of the $350,000, which is considered the improved value. The required down payment in this case would be $17,500.
This mortgage is completed in stages similar to a construction mortgage. The first advance will be for the purchase price, a second advance will be given once 50% of the renovations have been completed, and the final advance will be released once the renovations are entirely complete.
This is an excellent product that enables you to not only buy a home that’s more affordable due to required upgrading, but also allows you to customize your renovations.
Have questions about Purchase Plus Improvements options or your mortgage in general? Answers are just a call or email away!
*The postings on this site contain my own views and don’t necessarily represent the company’s positions, strategies or opinions.