Home prices in the Lower Mainland continue to be very high relative to both incomes and savings, making it difficult for buyers to find homes that suit their needs.  Many of the homes that are for sale are in need of substantial renovation work, including such things as new flooring, roofing, or landscaping.  Still more homes can be made more liveable by improving them with upgrades like the addition of a basement suite, or a new kitchen or bathroom.

Unfortunately, because prices are so high, many Borrowers struggle with down payment and cannot afford the additional immediate cost of renovations.  Thankfully, the mortgage market has created a product called “Purchase plus Improvements” to address this very issue.

Lenders will typically require a down payment of at least 5% of the Purchase Price, which is too often most (or all) of the Borrowers’ savings, leaving little left over for renovations or improvements. Under the Purchase plus Improvements program, lenders will allow the cost of Renovations to be added to the Purchase Price – the required down payment is only 5% of the total.

In order to qualify for Purchase plus Improvements, a firm quote from a qualified professional must be received and approved by the lender prior to subject removal. The steps involved are a little more complicated than with a standard mortgage, and vary a little between Lenders. If you are looking to purchase a home and renovate right away, contact your licensed mortgage broker to guide you through the process.