Purchase Plus Improvements is for homebuyers looking to purchase or refinance a home that could benefit from a few renovations. This program allows you to purchase a new home and combine the costs of the renovation into your purchase.
You can take advantage of a low mortgage interest rate and the simplicity of a single payment. You can buy your new home and pay for its renovations with one convenient mortgage and as little as 5% down. You'll be able to get started on improvements immediately after taking possession of your new home.

How does it work?

1. Make an offer on a house for a conditional period that is longer than the usual 10 business days.
2. Get estimates for the cost of improvements immediately after the offer is accepted from licensed contractors for the renovation work.
3. Submit a full application when all estimates have been received through your Mortgage Professional.
4. The maximum cost of the renovations that can be rolled in your mortgage will vary depending on the lender.
5. At this point, you'll be able to take possession of your new home and start the renovations.
6. Once the renovations have been completed be prepared to pay for a final inspection, if required.
7. Once the inspection has been done and confirmation of completion has been sent to the lender, funds will then be released to your solicitor who then pays the contractor directly.

For example:
Lets say your realtor introduces you to a property you really like except for the kitchen that requires some upgrading.
The estimated cost of the kitchen renovations is approximately $30,000; the current appraisal value and sale price of the home is $300,000; instead of the standard 5% down on the $300,000 ($15,000), a Purchase Plus Improvements Mortgage lets you place 5% down on the future value of the home ($330,000), which includes the cost of the kitchen renovations.

• Cost of Home: $300,000
• Standard Down Payment (5%): $ 15,000
• Projected Cost of Renovations: $ 30,000
• Approved Future Value: $330,000
• Total Down Payment (5%) $ 16,500

Some lenders will only allow 10% of the purchase value up to a maximum of $30,000-$40,000 depending on the lender. Ask your Mortgage Professional how much you qualify for.