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Purchase + Improvements
When the Home of Your Dreams Needs Work
A program where you can add money to the mortgage for renovations at the time of purchase.
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You would need to provide completed estimates before the application can be submitted to the lender. These estimates are added to the agreed purchase price and are submitted as one also referred to as the improved value. Borrowers can pay as little as 5% down payment on the improved value.
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​The "as improved value" is the home cost + repairs cost.
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NOTE: Please make sure extra time is added to the financing condition date so there is time to attain estimates.
How much can I add to the mortgage for reno's?
Lenders may have slightly different guidelines but the 2 insurer programs are:
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Max 10% of the “improved” value. Or;
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20% of the “improved” value up to $40,000
NOTE: The improved value still needs to appraise out/be an insurer approved value.
The Costs
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Lenders only reimburse for the work completed, meaning you need to be prepared to pay for the work upfront until the lender receives receipts and an inspection is completed.
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You start paying for the total mortgage amount on the date of possession. The “improvement” money is given to the lawyer who holds it in trust until the work being completed is confirmed.
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You may incur an appraisal cost at the beginning (unless insurer can approve value as is) and then also the cost for an appraiser to go back and confirm the work is completed. Approx $350 if need both appraisal and one inspection.