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29 Oct

Purchase plus Improvements

General

Posted by: Chase Cooper

Purchase Plus Improvements:

Get into your dream home today!  A lot of times we see that a client LOVES a home but there are just a couple of things they would change, this is very typical and a lot of times people may be walking away from THEIR DREAM HOME!

What if I were to tell you that you can ADD renovations to a home when you buy it!  The money for the Reno’s is put into the mortgage so that the cost of doing it isn’t a onetime upfront wallet drainer; but rather a slight increase on your mortgage payment per month and you get your dream home years sooner!

How this program works is you first need to find a home, once you do that you then decide what you would like to change.  This can be flooring, trim, cabinets, countertops, windows, roof etc.  You then need to find a contractor to come in and quote the materials cost and how much the labor will be.  As long as the quote doesn’t exceed 10% of your purchase price (350,000K mortgage you can go up to 35K renovations) OR a max of 40K you can then add this onto your mortgage.  So let’s say your original purchase price is 350,000 and your quote for renovations is 20,000.  Your new purchase price will then be 370,000.  The down payment will be based on this new amount; if we use 5% at 350K (17,500) and 5% at 370K (18,500) your difference in outgoing cash is only 1000 dollars!

How the program works is that once the quotes of been approved you will get a new commitment showing the new mortgage amount.  All the documents will be signed and when it is time to get your keys the lawyer will transfer everything in your name; they will then HOLD BACK the money for the renovations until they know the work is 100% complete, this is to ensure the work that was approved is what is going to be done (protects the lenders interest).  Most contracting companies will carry the cost of materials etc until the work is done.  Once it is done an inspection is ordered to confirm work is complete and then the lender is notified, when they confirm it is done they will instruct the lawyers to release the money to the client who then pays the contractor.

This is a very effective way to change a home to how YOU want it.

Call me for more questions regarding this amazing program

Chase Cooper

250-785-7171 or chasecooper@dominionlending.ca