In a time where homes are becoming less and less affordable to purchase it is worth considering as many options as possible to secure home within your comfort zone. One such way is detailed below in the Purchase Plus Improvements Mortgage Program that is commonly used here in Toronto by my guest blogger, Steve Parks, a mortgage broker with Redpath Financial
Are you thinking of buying a Toronto fixer upper?
Would land transfer plus down payment leave you without the necessary funds for a renovation?
There is a mortgage program that could open the door for you to get into your new home and extend the funds needed so you could have that new kitchen and or bathroom you have always wanted. This program through CMHC or Genworth called the Purchase Plus Improvements mortgage allows you to have the best of both worlds.
The program is pretty simple in nature. You must put a minimum of 5% down of the projected value of the home. Should you purchase for 500k and put 50k into the home the projected value will be 550k. In this example your down payment would be $27,500.00 The key to this program is that the money you spend is reflected in the appraised value once the work has been done.
Important notes are as such:
1. Get contractor estimates immediately after accepted offer
2. All work has to be completed and receipts submitted to lender to release funds
3. A walk through appraisal will need to be completed at the borrowers expense (usually around $350)
This is a great way to increase the value of your home while borrowing the money at today’s low interest mortgage rates.
For further information please call me.
T: 416.366.7284 ext. 4
Licence # 10964