Does the home you want to buy need a little TLC? The Purchase Plus Improvements Mortgage helps qualified home buyers make their new home just right for them. Renovation costs are included in the mortgage with as little as a 5 percent down payment.
The process is simple when applying for a Purchase Plus Improvements Mortgage. After you find the right home, you will need to get quotes from hardware stores or contractors for the renovation costs. The quotes need to outline the work that will be completed and the cost of the renovation project. The lender and the default insurers will approve the work being proposed and the expenses involved. The renovations are started when you take possession of the new home. The work can be completed by anyone as long as it is done properly and to code.
There are two ways a Purchase Plus Improvements Mortgage can happen. The first way involves the total cost of the renovation being less than 10 percent of the original purchase price. When the mortgage advances on the possession date, all renovation costs are held in trust with the lawyer. Home buyers are responsible for paying for the improvements up front. Once the lender has receipts totalling the improvement costs, the lawyer will write the clients a cheque. There is a time frame the work needs to be completed by and depends on the lender’s guidelines.
The second way involves the total cost of the renovation being greater than 10 percent of the original purchase price. The lender will allow clients to take up to three draws on the improvement funds. When a portion of the renovation is done, an appraiser will determine the percentage of work that is complete. The lender will advance money to the lawyer based on the appraiser’s report until the job is finalized. The improvements have to be finalized within a year.
Some common home improvements include updating or renovating a kitchen, putting in new flooring, painting, finishing or renovating a basement, adding a new patio or deck, installing energy efficient windows/doors and building a garage.
It is important to have firm quotes in place. Once possession of the home is taken and the Purchase Plus Improvements Mortgage advances, the mortgage amount cannot be increased.
Don’t miss out on the opportunity to make changes to your home as soon as you move in. The Purchase Plus Improvements Mortgage is a great program to take advantage of. To see if this program can help you affordably improve your new house into the home of your dreams, contact a member of The Biggar Team today!