Have you walked through an open house, and seen a property that’s almost perfect, but may be in need of an update, or a change before it’s the right one for you? Well, let me tell you that you’re not alone, and most people I’m sure have had this same thought. Based on today’s real estate prices, you may find yourself in a situation where you may not be abpe to buy the home of your dreams…at first. So why not buy a fixer-upper? Purchase something that you can change to your liking, and build exactly what you want. Best part is, I can help you. Let me tell you about a purchase plus improvement mortgage product.

What’s the difference between a normal mortgage product, and a purchase plus improvements program? When applying for a PPI product, the lender provides additional financing in order for you to improve the subject property. Here are finer details of the Purchase Plus Improvements mortgage product:

• Apply for up to a maximum of 10% of the “as-improved” market value, up to $40,000
• Utilize as little as 5% towards the down payment
• When the application is submitted for approval, the lender requires a construction quote to verify the work to be done on the subject property from a 3rd party
• Renovation to be completed within 120 days
• A third party (appraiser) must verify once complete
• Once the renovation is complete the lawyer would release the requested funds

Here’s an example:

Purchase Price: $480,000

Value of the Renovation: $40,000

As-Improved Value: $520,000 (new Purchase Price)

Maximum Borrow: $40,000

Purchase Price: $520,000

Down Payment: $26,000 (5%)

Mortgage Amount: $494,000

Mortgage Insurance: $17,784

Total Loan: $511,784

Monthly Mortgage Payment: $2,340*

Other ways to finance improvements:

Borrow money from the bank via a Line of Credit, but why would you bother doing that as the interest rate is much higher. This financially would not be a smart choice. Why borrow money at 7-8%, when you can borrow money based on your mortgage rate.

Purchase plus Improvements product may include improvements made such as:

• Painting
• Windows
• Flooring
• A new hot-water tank
• Bedroom upgrades
• Kitchen upgrades
• Bathroom upgrades
• New roof
• Basement finishing

Feel free to reach out to me for more information about the purchase plus improvements product if you think it may be right for you, and your next home.

All the best,

-D

*Based on todays best-fixed interest rate, amortized over 25 years.