Why Wait to Renovate?
Did you know that you can instantly increase the value of your home? There’s no need to save up or wait! The cost of your renovations can be included in your mortgage monthly payments at low rates without having to use costly, high-interest credit cards or second mortgages. This is a product called Purchase Plus Improvements. The search for your perfect home can be tiring — especially when you come across one in the perfect neighborhood, only to find that its kitchen is outdated, the floors need to be redone, the basement isn’t finished or the bathroom isn’t exactly the spa-like oasis you dreamed of. Rather than waiting seven to 10 years to tap into your equity on your home, you can instantly renovate at the time you purchase your home and the bank will finance it!
The first step is making the purchase offer conditional on getting approval for the renovation mortgage program. The next stage of this process includes getting a contractor to give you a quote to determine what will get done, and at what cost. The Canadian Mortgage and Housing Corporation (CMHC) will approve a loan of up to 95 per cent of the “as improved” value of the home. The bank will send an inspector to confirm that the work has been completed, and the bank will then release the funds to the client.
The benefit is that banks will only allow you to access 65 per cent of your line of credit, so you can be waiting quite some time before you can tap into your equity. Another option is a second mortgage at much higher rates. A disadvantage of a high ratio mortgage — and it’s certainly not for everyone — is that the mortgage insurance premium gets added to your mortgage. To be sure homebuyers are not biting off more than they can chew, it is important they do their research and speak with a mortgage professional.
Visit Cristina Piccirillo
at Dominion Lending Centres’ new location:
281 Woodbridge Ave., Unit 28, Woodbridge, Ont.
905-605-LEND / firstname.lastname@example.org