29 Mar Purchase plus improvements program
Does the new home you are going to purchase need some renovations? Find out about the Ideal program for consumers looking to purchase a home that has great potential but needs a little TLC. The Purchase Plus Improvements program allows you to make improvements immediately after taking possession of your new home and have the costs rolled into one easy-to-manage mortgage.
Here is the scenario: you’ve done your homework, waited patiently and have now found the home you have been searching for. This home has all the features you like and is right in your price range. The only issue is that it needs a few improvements. These could be a new, modern kitchen, new floors or even a new paint job. However, once you calculate the money you need for the down payment, the taxes and the legal fees, you realize that you do not have the funds you require for that small improvement. So, what are you to do?
The solution is very simple: talk to your mortgage broker about the Purchase plus Improvements Program. This program allows qualified purchasers to borrow up to 20% of the post-renovation value of a home, even with as little as 5% down. First of all, you have to get a mortgage pre-approval from your mortgage broker, to determine your maximum approval amount. Once you know this, and you have found home you have been looking for, you must get a general idea of what renovations need to be done as well as the cost of the said renovations. It is important to remember that the purchase price plus the renovation cost cannot exceed the maximum approval amount. Once your offer is accepted, provide the accepted offer, as well as the quotes for the work to be done to your broker. The broker will then have the lender approve the mortgage with the cost of the renovations included in the mortgage.
Once you become the owner of your home, you can begin the renovations. Once the renovations are completed, notify your broker and they will send out an appraiser to complete an inspection to verify the work is completed as per the quotes that were provided. The lender will receive the inspection report from the appraiser, and validate that the work has been completed in a good manner and as per the quotes provided. They will instruct the lawyer that they are able to release the funds to you, to pay the contractor.
Do not let a “need for a renovation” stop you from buying the home of your dreams for both you and your family.