Ever heard of a purchase plus improvements mortgage? It’s a game-changer for homebuyers, allowing you to finance both the purchase of a property and the renovations it needs. Let’s dive into how this works and why it might be the perfect solution for you.

A purchase plus improvements mortgage lets you borrow additional funds for renovations or upgrades to a property you’re buying. This can be incredibly beneficial if you don’t have enough cash on hand for both the purchase and improvements.

Here’s how it works:

• Find a property you love that needs work.
• Provide the lender with quotes for the renovations.
• The lender adds these costs to your mortgage.
• At closing, funds for the purchase and renovations go to your lawyer. The renovation funds are held in trust until the work is completed and approved.

Funds may be released in stages as renovations progress, ensuring the work is done as planned. This type of mortgage spreads the renovation costs over the life of the loan, making it manageable and convenient.

Think of it like financing a car with snow tires included. You spread out the cost rather than paying upfront.

Not all lenders offer this mortgage, so do your research. There might be specific restrictions, like a minimum loan amount or a requirement for licensed professionals to complete the work.

While there are many benefits, there are also some downsides. Renovations must add value to the property to justify the additional funds borrowed. Also, interest rates might be higher due to the increased risk for the lender.

Proper planning and budgeting are crucial. Ensure the renovations are within your means and will add value to the property. With the right approach, a purchase plus improvements mortgage can turn a fixer-upper into your dream home!

Your trusted & friendly Mortgage Agent:

Divyang Patel – 647.740.8902

www.divyangmortgages.ca