In today’s ever increasingly competitive Toronto housing market, it is becoming very difficult to find exactly the home you are looking for. Whether you are a first time home-buyer, or looking to up-size, don’t be put off by the inability to find exactly what you had dreamed of. Think about buying a fixer-upper. This will greatly broaden your search and open your eyes to a whole new world of possibilities!
Why not renovate and create your own dream property? There is a mortgage solution called Purchase Plus Improvements. With this program, the lender is able to provide additional financing so that you can make the improvements to your new property upon moving in. This type of mortgage is so beneficial because you are able to roll the costs of these home improvements into your mortgage and not on to those high interest credit cards, or unsecured lines of credit.
Here are the main qualifiers for this program:
- Apply for up to a maximum of 10% of the as-improved market value (max. $40k)
- Renovation to be completed within 120 days
- A third party (appraiser) must verify completion
- Once the renovation is complete the lawyer would release the funds
Listed or Purchase Price: $400,000
Value of the Renovation: $30,000
As-Improved Value: $430,000 (New Purchase Price)
Purchase Price: $430,000
Down Payment: $21,500 (5%)
Mortgage Amount: $408,500
Mortgage Insurance: $16,340
Total Loan: $424,840
Monthly Mortgage Payment: $1944 (based on an interest rate of 2.69% and 25 year amortization)
It may seem like a tall order to seek out additional financing after you just made your biggest investment in home ownership. Why not simplify your life and save money on interest by taking advantage of this type of program?
With all the different types of mortgages out there, be sure to contact your local Dominion Lending Centres mortgage professional so we can explain how “we’ve got a mortgage for that”!