Many homebuyers in Brampton and the GTA who are interested in older properties often find themselves in a dilemma: they find a property that suits them, but it needs costly upgrades so they decide to pass on what might be the perfect home. Good news. If you are looking at a fixer upper, there is a mortgage that can help you get some or all of those needed renovations.
A “Purchase Plus Improvements” mortgage adds the cost of your renovations into your mortgage, so you don’t have to use your high-interest credit card or sell investments to pay to get the work done. This mortgage will cover the purchase price of your home, plus any renovations that will increase the value of the property, up to $40,000. You can immediately enjoy your renovations and have the renovation costs spread out over the life of your mortgage. It’s a cost-effective way to get into your dream home. You can then use can use your pre-payment privileges to pay the renovation off faster.
Here is how a Purchase Plus Improvement Mortgage works:
- You obtain cost estimates for the renovations you want.
- You then obtain two appraisals. First you need the value of the property “as is” and secondly, the estimated value of the property once your renovations are completed.
- Your lender will add the estimated costs of the renovation into your mortgage. When your mortgage closes, the committed amount of the mortgage will be advanced to your lawyer, who will hold back the renovation funds until the work has been completed and inspected.
- The renovation funds are released to you upon completion. There are options we can discuss for carrying your expenditures until you receive the funds.
- I will always be available to help you through this process and answer your questions.
If you find a fixer upper in Brampton or the GTA that can be renovated into the home of your dreams, get in touch today. Soon you’ll be able to enjoy your new home and your new kitchen!
