Thursday, July 15, 2010

Mortgage Tip: Purchase Plus Improvements Mortgage

Did you know that CMHC recently reported that 20% of borrowers take on additional consumer debt after closing on a purchase? Many of these borrowers are using this additional debt to complete home improvements. Instead of purchasing a home and racking up unsecured debt to pay for home improvements, why not include the cost of the home improvements into your mortgage?
I have the ability to set up a purchase plus improvements mortgage. It’s easy to set up and will allow qualified purchasers to finance the costs of immediate renovations or improvements through their mortgage!
In order to utilize this program you must submit written quotes of the work to be completed. Once you take possession of your new home you will usually have 90 days to complete the work. Once the work is complete and you have paid the invoices you can submit the receipts to your lender who will then advise your lawyer to release the funds to you. An inspection may be required by an appraiser to confirm that the improvements have been made.
This program has worked really well for some of my clients. I have had clients that wanted to a finish a basement and used this program to fund their basement renovations, I have also set up purchase plus improvement mortgages for people who needed to install a new furnace, flooring, and kitchens etc!
If you’re thinking of buying a fixer upper, speak to me first!
CMHC's Purchase Plus Improvement Mortgage Guidelines:
http://www.cmhc.ca/en/hoficlincl/moloin/hopr/upload/CMHC-Improvement.pdf

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