Have you ever wondered if there was a way to get a mortgage larger than the purchase price of your home to do some renovations?
Do you want to do some renovations on a property you would like to purchase and don’t have the money or think you can afford to renovate?
The answer for you may exist in the Purchase Plus Improvements Program. This is a product available through the Angela Calla Mortgage Team where you can purchase a home and add 10%-20% or a maximum amount of $40,000 to your mortgage in order to improve the quality of your home at today’s record low rates when you’re making less than a 20% down payment.
How it works:
Improvements cannot exceed 10-20% or the lesser value of $40,000 of the property’s value or as improved. You would have to qualify for the full mortgage and improvement amount, and the advance would be given to you in one lump sum after the work has been completed. The extra funds are held in trust with the lawyer until the lender approves the appraisal or receipts, depending on the lender’s policy, to confirm the work is complete. Two to three quotes from a contractor will be required by the lender to review for approval, and the work should be completed within 90 days (some lenders will allow for a longer timeframe). Each case is different and we will help you every step of the way!
4 top reasons to consider this product:
1) You will not be accumulating outside debt at a higher interest rate, keeping with an affordable budget for buyers. Borrowers who use a line of credit or credit card would have higher carrying costs, when compared to fully discounted mortgage rates.
2) Helps quickly improve your new property’s value.
3) The appraiser/lender has to confirm the work has been completed, but it is not essential to confirm an increase in value of 20% for some lenders.
4) Lenders will generally have a policy requiring the work to be completed within 90 days, but some lenders have different timelines.
What renovations apply:
Different lenders have different policies, but most lenders approve fixed assets (eg, countertops, floors, paint, etc).
Understanding the numbers:
It’s important to keep in mind that the banks would prefer for you to pay for renovations via a line of credit or credit card as they earn much more money off these products. If you consider that a payment on a $10,000 loan not included in your mortgage works out to $300 dollars a month and $10,000 within a mortgage is approximately $50 a month, if you qualify, this product can save you $250 a month.
The Angela Calla Mortgage Team is always here to ensure you have the best product available for your needs, while saving you the most amount of money throughout the life of your mortgage.
Worried about the stress of living through renovations? This video is worth watching, FairTradeWorks make renovating easy! http://vimeo.com/67174441
Angela Calla, AMP
Dominion Lending Centres-Angela Calla
Host of ” The Mortgage Show” Saturdays @ 7pm on CKNW AM980 Phone :
604-802-3983 Fax: 604-939-8795
Email: acalla@dominionlending.ca