Have you found your dream house in a mature neighbourhood that you desire, but it is dated and the kitchen needs a complete renovation? Or you would like to purchase a new build, but it does not have a garage or the basement is not complete. You have used all of your savings for the down payment on your new property, but would like to complete the renovations or have the garage built as soon as possible. There is a mortgage product for you called Purchase Plus Improvements.
This program allows you to commence renovations as soon as you purchase your new home all for as little as 5% down. This 5% down would include the purchase price as well as the cost of the renovation. So if you are purchasing a home for $300,000 and would like $20,000 for renovations the down payment required would be $16,000. You provide quotes to the lender in the mortgage application process and if the lender approves you receive the money once the renovations are complete and receipts are provided.
It is important to point out that the interest rate for mortgages are generally lower than those for lines of credit another option people utilize for renovations. You do have a limited amount of time to complete the renovations, generally 120 days. The maximum allowable amount is generally $40,000 or 20% of the post-renovation value.