Purchase Plus Improvement
What is it?
The purchase plus improvement mortgage is an excellent product if buying a home that needs TLC. The image above clearly demonstrates an exaggeration as the home you are purchasing must be structurally sound.
Picture this, you have been running around with your very patient realtor for months, trying to find your dream home. You find the ALMOST perfect place except the kitchen is hideous. Do you really want to walk away when all the other boxes are checked? Assuming the answer is no, this could be a fantastic solution.
Are you having difficulties finding a home within your price range? With this product, you can take advantage of lower-priced homes requiring updates. Maybe you want to renovate the kitchen, bathroom or replace all the windows. Whatever the improvements are, they must add value to the home in order to qualify for the purchase plus option.
How Does it Work?
Essentially, the bank will lend qualified borrowers the funds and add the amount of the improvements to your mortgage. This can be done with as little as 5% down. There are guidelines to follow and all Purchase Plus Improvement Mortgages require quotes for the work being completed. This is part of the approval process. Once approved and the closing date has arrived, the lender will instruct your lawyer hold back the funds for the improvements. When the lender is satisfied with the upgrades the lawyer will release the funds to pay your contractors, installers etc… It is recommended that you have a line of credit in place as contractors will request a deposit and funds for materials up front.
How do I know if it’s right for me?
Contact your mortgage professional to discuss all options available to you. Everyone’s situation is unique and should be treated that way. It is important to be informed before you make one of the most significant purchases of your life.