Don’t shy away from the perfect home if it needs a few improvements.
Barb Pinsent from Mortgages by Barb explains “A Purchase Plus Improvements Mortgage allows qualified purchasers to borrow up to 20% of the post-renovation value of a home, even with as little as 5% down.”
HERE IS WHAT YOU NEED TO DO:
Obtain a mortgage pre-approval from your mortgage broker, to determine your maximum approval amount.
You must find a house and have a general idea of what renovations need to be done as well as the cost of the renovations. “The purchase price plus renovation cost can not exceed your maximum approval amount.” says Barb. Lenders will request written quotes to be provided, detailing the work to be done, as well as the cost.
Once your offer is accepted, provide the accepted offer, as well as the quotes for the work to be done to your broker. They will have the lender approve the mortgage with the cost of renovations included in the mortgage. The required minimum downpayment is 5% of the purchase price including the renovations.
Once you take possession of your home, you can begin the renovations. The Lender will instruct the Solicitor to hold the additional Renovations funds, until the lender confirms the work has been completed. Once the renovations are completed, notify your broker and they will send out as appraiser complete an inspection to verify the work is completed as per the quotes that were provided.
The lender will receive the inspection report from the appraiser, and validate that the work has been completed in a good manner and as per the quotes provided. they will instruct the lawyer that they are able to release the funds to you, to pay the contractor.
If you are interested in a Purchase Plus Improvements Mortgage contact Barb Pinsent from Mortgages by Barb on 780-370-1490.