So you’ve spent weeks with a real estate agent looking at everything & anything in your price range. You’re getting frustrated because every property you look at has at least one “x” on your checklist. Did you know that you have financing options to improve a property so that it meets your needs & wants? The nation’s mortgage insurers (CMHC, Genworth & Canada Guaranty) offer a financing program that can make you dreams possible. The program is called Purchase Plus Improvements, or simply known as “Purchase Plus”. Improvements that qualify must be permanent & add to the value of the property. Examples of previously accepted improvements are; new roof, windows, landscaping, flooring, fences, decks, pool, finished basement, etc.
The advantage of this program is the lender will recognize the “as improved” value on the close of the mortgage. To prove the value of the improvements the lender will require a contractor’s quote for the work to be done. Lenders will generally allow the Barrie home purchaser to add up to 10% to the purchase price (some have been known to allow up to 20%).
Once you move into the home you have up to 90 days to complete the improvements. Your real estate lawyer is required to “hold-back” the improvement funds until the work is complete. The lender will be normally require an inspection from a certified appraiser to confirm that everything listed in the contractor’s quote. Once the lender receives the report & is satisfied that the work is complete they will allow the lawyer to release the funds. An important tip is to ensure you have enough funds available to cover any deposits the contractor requires because you won’t receive any money from the lender until the work is 100% complete.
So don’t stress, there are options available to “make” the almost perfect Barrie house into your family’s dream home.
Darren Robinson is a Barrie Mortgage Broker, dedicated to offering the best mortgage strategies and provides personal assistance to help people qualify for difficult mortgages and loans. Call 705.737.6161