PURCHASE PLUS IMPROVEMENTS
January 6, 2015 | Posted by: Dennis Street
PURCHASE PLUS IMPROVEMENTS.
Looking to purchase a house but your unable to locate the exact home with the desired features? This can be real problem when you are having to look in a market with limited houses for sale. The solution is our Purchase Plus Improvement Program. Unfortunately, not many are aware of this mortgage product from Buyers to Realtor’s and it’s a great problem solver!
You need to have working closely together a Mortgage Broker and Realtor. The Realtor can locate a home with the main features and have the ability to add in your improvements to be sure there is a fit for you. The Mortgage Broker will request that you obtain construction quotes by a general contractor. That cost added to the purchase price is submitted as the new purchase price for approval and your down payment is based on that figure.
An appraisal of the property will be required for the Lender and CMHC or Genworth. The appraisal will have two values, the current value of the time of purchase and then the improved value of the property once the improvements are complete. The appraisal cost will be a little higher due to this requirement but certainly neccessary. The Maximum improvement amount is limited to $40,000 or 10% of the property, whichever is less. The improvements can exceed $40,000 but not more than 10% of the improved value.
Lastly, the work must be completed within 90 days of the mortgage advance at which time your solicitor will be instructed by the Lender to release the remaining funds. There you have it! Call me and I’ll review and assist you in getting started.
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