Purchase Plus Improvements

So the house you’ve set your sights on is something of a diamond-in-the-rough. There are lots of great reasons to buy a home that doesn’t show perfectly. Maybe your budget is tight or you just love rescuing older homes. If you have an eye for well-chosen renovations, and perhaps want to exchange some of your home improvement talents for home equity… then a classic “fixer upper” or “handyman’s special” can be a terrific way to build equity in your home. For those homebuyers who are good at it, the rewards of improving a neglected home can be more financially rewarding than their day job.

Maybe the house of your dreams costs $450,000 but you feel it needs $50,000 to $60,000 in immediate improvements. You figure the finished home will be worth at least $600,000: a great investment. But where does the financing come from to get started on the work?

Good news. Now there are mortgage options that reward homebuyers willing to get involved in a fixer- upper by rolling renovation costs into the mortgage.

These “purchase plus improvements” mortgages cover the purchase price of the home, plus any renovations that would increase the value of the property. Better still, these mortgages are available on a 35-year amortization. No waiting to afford piecemeal improvements; you get an immediate lift in the liveability and value of the property. And right now, you can secure this type of mortgage at today’s low rates – and roll it all into one mortgage payment. The lender likes it, too; you’re adding value, and the mortgage is secured against an improved property!

How it works?

List out your renovation needs

What are homeowners improving? Often, a coat of paint and a fresh new wood floor can do wonders for improving a home’s value. Kitchen and bathroom renos are always popular, of course. And finishing basements and adding decks are also common improvements that add to the value and the enjoyment of a property.

Obtain quotes

You’ll need to have a realistic assessment of what’s required – including written quotes for the renovations you’re considering. An appraisal may be done which considers the increased value of the home with the renovations completed.

Improvements approved

The lender will assess based on the property and the renovations listed the amount of money they will finance. Once in place they will holdback these extra funds until you are completed your home renovations.

Move in and start the renos

After you have possession on your new home, you can start the renovations. You may be a handy-(wo)man or you might hire an independent contractor to help you with your dream home.

Renovations complete

Once the renovations are completed, an appraiser will come to view the property to confirm everything has been completed. The lender will then release the funds to your lawyer’s office, and you can pay off your renovation debt.


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	Purchase Plus Improvements So the house you’ve set your sights on is something of a diamond-in-the-rough. There are lots of great reasons to buy a home that doesn’t show perfectly. Maybe your budget is tight or you just love rescuing older homes. If you have an eye for well-chosen renovations, and perhaps want to exchange some of your home improvement talents for home equity… then a classic “fixer upper” or “handyman’s special” can be a terrific way to build equity in your home. For those homebuyers who are good at it, the rewards of improving a neglected home can be more financially rewarding than their day job. Maybe the house of your dreams costs $450,000 but you feel it needs $50,000 to $60,000 in immediate improvements. You figure the finished home will be worth at least $600,000: a great investment. But where does the financing come from to get started on the work? Good news. Now there are mortgage options that reward homebuyers willing to get involved in a fixer- upper by rolling renovation costs into the mortgage. These “purchase plus improvements” mortgages cover the purchase price of the home, plus any renovations that would increase the value of the property. Better still, these mortgages are available on a 35-year amortization. No waiting to afford piecemeal improvements; you get an immediate lift in the liveability and value of the property. And right now, you can secure this type of mortgage at today’s low rates – and roll it all into one mortgage payment. The lender likes it, too; you’re adding value, and the mortgage is secured against an improved property! How it works? List out your renovation needs What are homeowners improving? Often, a coat of paint and a fresh new wood floor can do wonders for improving a home’s value. Kitchen and bathroom renos are always popular, of course. And finishing basements and adding decks are also common improvements that add to the value and the enjoyment of a property. Obtain quotes You’ll need to have a realistic assessment of what’s required – including written quotes for the renovations you’re considering. An appraisal may be done which considers the increased value of the home with the renovations completed. Improvements approved The lender will assess based on the property and the renovations listed the amount of money they will finance. Once in place they will holdback these extra funds until you are completed your home renovations. Move in and start the renos After you have possession on your new home, you can start the renovations. You may be a handy-(wo)man or you might hire an independent contractor to help you with your dream home. Renovations complete Once the renovations are completed, an appraiser will come to view the property to confirm everything has been completed. The lender will then release the funds to your lawyer’s office, and you can pay off your renovation debt.
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