Does your kitchen need an update? Is your bathroom in desperate need of a makeover? Maybe your home needs a fresh coat of paint, or new hardwood floors. All homes have their flaws and imperfections. Some can handle living with deficiencies in their home, but for others, this can be a deal breaker. A purchase plus improvement mortgage product is for consumers looking to purchase a home that has great potential, but needs a little TLC. You can make needed improvements to your home immediately after taking possession, and have the improvement costs rolled into your monthly mortgage payments.

As a rule with this mortgage product, your improvement maximum is 10% of the “as improved value” of the home, to a maximum of $40,000. For example: If the purchase price of the home is $350,000, and the “as improved value” or post renovations of the home is valued at $390,000, you can qualify for 10% of the $390,000. Which means you can borrow $39,000 to cover your renovation expenses. Once you have found a home, you’ll have to provide quotes from a licensed contractor, including all costs associated with your renovations. I will need to submit these quotes along with your purchase approval to the lender. The lender may require an appraisal of the home with an as-is and as-complete value. However, if you’re putting less than 20% down on the purchase, often only a final inspection is required to confirm the improvements have been done. On the day you take possession of your new home, you can start working on the renovations. Please note that the renovations will have to be fully completed and inspected before you’re advanced any renovation funds from the lender. In other words, you will have to use your own funds to pay the contractor, and be reimbursed after the lender has inspected and confirmed that the work is done. At no point will you be given money prior to the work being completed.

As always, feel free to contact me if you have any questions, or feel that this product is right for you.