As part of our services, we have access to a number of expe-rienced, vetted, real estate pro-fessionals who are happy to share their expertise. In the next few weeks, we will be highlighting tips from our roster of specialists.
This week, we’ll be offering a mortgage tip that could save you thousands of dollars and cut back on the amount of time you’d spend finding ways to cough up an extra 20-30K in renovation costs.
Have you ever found an almost perfect rental property that you could make perfect with an additional $20 – $30K?
Our colleague Ken Kirkpatrick, of Wise Mortgage shared a brilliant, yet unknown mortgage that includes home improvement funds – it’s called a purchase plus improvement mortgage.
This mortgage allows you to have that garage or deck built, or the even the basement bedroom developed as part of your mortgage funds.
How does it work?
Let’s say you buy the house for an agreed price of $ 380,000, you may get the mortgage approved for that purchase price plus an additional $ 20,000 in improvements, for a total of $ 400,000.
100% of the funds are advanced at closing to the solicitor, who holds funds in trust for you, until the necessary work is completed, inspected, and the lender has authorized the advance. You will then make mortgage payments as if the full amount has been advanced.
For CMHC it is the lesser of 10% of the purchase price or $60,000 (which is great for higher priced houses).
I only wish I had met Ken before buying my first property…