Puchase Plus Home Improvement/Renovation Credit
Get into the dream home you always wanted to
You've decided to buy a home, and you've been searching for the right house.
Now that you found one, it is nearly perfect: decent condition, within budget, nice neighborhood.
The thing is, there’s a dreaded 1960s kitchen, with its cracked ceramic tiles, leaky taps and old cabinets - or basement is unfinished, but you were hoping ONLY if it was finished - an expensive deal-breaker that wasn't accounted for in original budget.
The first choice is walking away from it.
Second option is getting a line of credit - not necessarily the smartest way to go and definitely not easy to obtain.
Third is the purchase plus improvement - renovation credit. This program does not only get you this home and the dream kitchen, but it also saves you from a second loan by allowing you to add the renovation cost to the purchase price - you can benefit from a low mortgage interest rate and make only one payment.
The bank can lend up to 95% of the improved value of the house.
The improved value should be maximum 10% of the original price or $40 000, whichever comes first.
Example: the house is priced at $350,000 but it needs another $25,000 in renovations. You can add in the renovations cost to the purchase price and bank will lend against the total value.
- Purchase price $350,000
- Renovations $25,000
- Total cost $375,000
- Lending value $375,000
- Max. Mortgage $356,250 (95% of $375,000)
- Min. Down payment $18,750
With the Renovation credit program, the down-payment is $18,750.
Your usual down-payment would have been $17,500. The difference of ONLY $1000, BUT now you would have to find $25,000 to do renovation.
If you have any questions as to how we can help you with this please feel free to contact us today for a free no hassle quote